Taiwan accelerates drone production for defense and exports as China threat looms

Taiwan's government is ramping up military drone production as a strategic response to China's military threat, while simultaneously positioning domestic manufacturers as competitive exporters to the US military and allied nations. Taiwan's Ministry of National Defense proposed a $6.6 billion special budget on June 18 to purchase domestically produced drones over six years, with plans to acquire more than 208,000 coastal attack drones, over 1,400 coastal reconnaissance drones, and 1,320 uncrewed surface vessels between 2026 and 2031. This represents a substantial expansion of Taiwan's current military drone inventory, which comprises approximately 5,000 US-made attack drones and domestically produced systems.

The military modernization effort has been accompanied by accelerated combat testing. During military exercises in early June, Taiwanese soldiers deployed Altius-600 loitering munition drones manufactured by Anduril Industries to strike offshore targets. Separately, Taiwanese Marines used Taiwan-made drones in similar offensive operations. Taiwanese citizens have also begun enrolling in drone flight training programs, reflecting broader civilian engagement in the defense initiative.

Beyond military applications, Taiwan's drone sector is experiencing rapid commercial growth. The country exported $115 million in fully assembled drones between January and March 2026, surpassing the $93 million total for all of 2025, according to Taiwan Premier Cho Jung-tai. Taiwanese companies, including Thunder Tiger, are actively marketing their drone technology and components to the US military and European buyers as alternatives to Chinese-manufactured systems while establishing international partnerships to expand their export capacity and manufacturing reach.