As China looms, Taiwan makes more drones for defense and the US military

Taiwan is significantly expanding domestic military drone production, with its government proposing a special budget to purchase over 200,000 coastal attack drones and related unmanned systems between 2026 and 2031. This buildup is driven by the need to strengthen Taiwan's defense against a potential invasion by China while simultaneously positioning Taiwanese drone manufacturers to export to the US military and other international buyers. Taiwanese companies are establishing partnerships with Western firms to add AI and software capabilities to their hardware expertise, and some have already qualified for US military purchasing lists. However, Taiwanese manufacturers face substantial challenges, including political disagreement over funding, competition from cheaper Chinese drone producers that dominate global markets, and the need to build supply chains that avoid Chinese-made components.