TheChek News Flow

Taiwan Lines Up $7 Billion Boost for Drone Builders to Counter China

Funding aims to support a homegrown industry seen as vital to island’s defense

TAIPEI—Taiwan’s legislature approved a plan on Thursday to spend over $7 billion on drones over the next six years, investing in a strategy to deter an attack by China and supporting an emerging domestic industry that aims to be a world leader.

By placing bets on acquiring a full fleet of uncrewed systems, including aerial and undersea drones, Taiwan hopes to build defensive capabilities intended to make its far more powerful adversary think twice about invading.

Taiwanese military planners said they are taking a page from Ukraine and Iran to counter the threat from China, which claims the self-ruled democracy as part of its territory and hasn’t ruled out taking it by force.

But China has a formidable lead in drone production. The head start and imbalance add to the urgency for Taiwan to develop a military-drone supply chain that can flourish without relying on Chinese components, Taiwan officials say.

“Better late than never,” said Vice President Hsiao Bi-khim, noting how closely Taiwan had studied how Ukrainian drone units built asymmetric warfare capabilities from the “battlefield of blood and tears.”

Taiwan has launched an islandwide effort to bolster drone production. In one indication of momentum, it exported more than 85,000 drones in the first two months of this year, compared with 3,473 in all of 2024, according to the government-funded Research Institute for Democracy, Society and Emerging Technology, or DSET.

Making drones for export has helped Taiwan’s homegrown sector grow as it waits for more reliable domestic demand, analysts say. The sector’s total value expanded to $155 million in 2024 from $87 million in 2023, according to a DSET report published last year.

The new funding plan could potentially bring a more reliable, larger demand for drone production, giving a boost to Taiwan’s domestic industry and building deterrence, according to Cathy Fang, a policy analyst focusing on drones at DSET in Taipei.

“Drones are critical because they directly support Taiwan’s effort to build a more distributed, survivable and asymmetric defense posture,” said Fang.

“If Taiwan can convert the six-year annual-budget framework into timely, predictable, and sufficiently large procurement orders, the spending can strengthen both deterrence and the resilience and competitiveness of Taiwan’s domestic uncrewed-systems industrial base,” she said.

The plan is focused on buying Taiwan-made drones, but doesn’t rule out foreign acquisition.

The approved spending plan wasn’t as robust as that sought by the ruling party, which sought a special budget of around $6 billion.

The opposition-controlled legislature approved a higher figure but is requiring that it be spread over a longer period, with more conditions. It also delays implementation and includes the funds in annual budgets, which require annual approval.

“The final passed version reflects a compromise,” said Fang. “The main uncertainty is implementation.”

Taiwan’s Ministry of National Defense expressed regret that the government’s proposed budget had failed to pass. That proposal allocated funding specifically for the purchase of three types of uncrewed platforms over the next five years: coastal surveillance drones, coastal attack drones and small one-way attack drone boats.

The opposition-approved bill must still be signed by Taiwan Premier Cho Jung-tai, a member of the ruling Democratic Progressive Party, to take effect.

Following the vote, Cho didn’t say whether he would sign it.

“What I care about is national security,” Cho said. “We will carefully evaluate this from the perspective of national needs and national security.”