A missing link: Taiwan’s drone innovation needs Europe’s support
A missing link: Taiwan’s drone innovation needs europe’s support
WRITTEN BY THIJS STEGEMAN
29 July 2025
In June, the normally quiet port of Su’ao in Eastern Taiwan became the stage for a significant display of technological progress. Organised by the Taiwanese Ministry of National Defence-affiliated National Chung-Shan Institute of Science and Technology (NCSIST), a dozen private companies — domestic and international — showcased a new generation of autonomous sea drones. These included sophisticated AI-powered swarms, agile submersibles, high-speed suicide drones designed for rapid strikes, and advanced reconnaissance unmanned surface vehicles (USVs).
This event marked more than just a technological showcase; it signalled a quiet revolution in Taiwan’s defence posture. The emphasis on USVs was a direct response to the changing nature of warfare being pioneered in Ukraine. Geographical and historical differences aside, Taiwan and Ukraine are both threatened by a much stronger adversary and need to rely on asymmetrical systems to maintain an effective deterrence. However, while Taiwan has taken steps towards this goal, especially with the inclusion of drones in a layered defence posture in its March Quadrennial Defence Review (QDR), scaling production remains an obstacle due to high costs, the exclusion of Chinese components, and limited domestic orders.
For Europe to help Taiwan significantly scale its drone production capacity, and to de-risk its own drone supply chains, the EU should make Taiwan a partner in the Readiness 2030 initiative.
Inclusion in Europe’s Readiness 2030 would help mitigate these challenges, boost orders through joint procurement and SAFE loans, and support EU de-risking goals through Taiwan’s non-Red supply chain. While a formal Security and Defence Partnership with Taiwan would be too sensitive, the EU could find other pathways to include Taiwan as a partner to profit from the island’s drone innovation and help it defend itself.
Ukraine’s success shapes Taiwan’s defence doctrine
The Su’ao expo and inclusion of USVs in the QDR were direct responses to Ukraine’s successes with USVs in the Black Sea. Despite lacking a conventional navy, Ukraine was able to contain Russia’s fleet to its protected harbours, allowing Ukraine to continue exporting grain and other goods through the port of Odessa. According to some sources, exports have even surpassed pre-war levels. In August 2023, Ukraine used naval drones to attack Russia’s naval base in Novorossiysk, resulting in significant damage. In early 2025, Ukrainian Magura V5 naval drones even shot down two Russian Mi-8 helicopters using heat-seeking missiles, the first recorded instance of an aircraft being taken down using USVs.
Taiwan quickly learned from Ukraine. In March, it unveiled an updated defence posture with the publication of its QDR, which embraced the use of naval drones as part of a layered denial doctrine. Where its previous doctrine primarily focused on “decimating the bulk of the adversary’s combat power on the landing beach”, the 2025 QDR emphasises gradually “attriting” (削弱) the enemy through multiple layers, including while still at sea. In 2024, the Taiwanese Ministry of National Defence tendered 3,200+ drones, and in early 2025, it revealed plans to obtain another 47,000 UAVs. In March, a Taiwanese shipbuilding firm debuted its domestically built USV, the Endeavor Manta, which can fire light drones and explode on impact. These developments highlight how Taiwan, as a tech powerhouse with strong Western support, is well-positioned to capitalize on the ongoing military drone revolution.
Taiwan’s progress on drone development
To support its domestic drone innovation and manufacturing ecosystem, Taiwan established the Taiwan Excellence Drone International Business Opportunities Alliance (TEDIBOA) in September 2024. Since then, TEDIBOA has rapidly brought together leading domestic drone developers and R&D centres. It aims to establish a globally competitive manufacturing hub for both aerial and naval drones, as well as a non-Red supply chain that excludes Chinese components. To achieve these ambitions, the Lai administration is planning to invest USD 1.35 billion over four years in R&D. A substantial portion of this investment is earmarked for establishing the Asia UAV Innovation Center and the Minxiong Aerospace Industrial Park.
While these initiatives are commendable and needed, the scale is not ambitious enough. China is currently the leader in drone manufacturing and innovation, and is actively learning from Russia’s military actions in Ukraine — including through espionage — and implementing these lessons in preparation for any future cross-strait conflict. Therefore, Taiwan must adopt a similarly adaptive and forward-leaning approach. Taiwan already operates at the cutting edge of drone innovation, but its current goal of producing 180,000 UAVs annually by 2030 pales in comparison to Ukraine’s actual production of 1 million drones in 2024, targeted 2.5 million drones in 2025, and China’s current capacity of 500,000 drones per month. Even though drone innovation progresses continuously, Taiwan needs to already have sufficient production capacity in place in the event of military escalation. Unlike Ukraine, Taiwan likely would not have years to scale its production, and at its current pace, it would be overwhelmed by Chinese drones.
A recent report by the Research Institute for Democracy, Society and Emerging Technology (DSET), a Taiwan-based government think tank, outlines the key challenges Taiwan faces in moving from R&D to significantly scaling its drone industry. The report cites high manufacturing costs — primarily due to the exclusion of Chinese components — and low domestic and foreign procurement as the main limiting factors for scaling Taiwan’s drone industry. In response, Taiwan is aiming to address these issues by working with democratic partners.
TEDIBOA has signed memorandums of understanding (MoUs) on drone cooperation with companies and Chambers of Commerce in Lithuania, the Czech Republic, Poland, and Latvia, as well with Japan’s drone industry alliance and with US companies. The MoUs signed with European partners focus on industrial collaboration, joint R&D, and a promise to work on improved market access. However, these MoUs currently represent only preliminary cooperation, lacking the substantial investment, procurement agreements, and standardised integration frameworks needed to significantly scale Taiwan's drone sector. With renewed European focus on defence, a real opportunity has emerged for both Taiwan and Europe to jointly invest in drone development.
International support and the role of allies
After falling short of their defence spending commitments for years, European countries are beginning to invest in their defensive capabilities. During the June NATO Summit, European leaders committed to spending at least 3.5 per cent of GDP on defence matters, with an additional 1.5 per cent on related infrastructure and aid to Ukraine. European actors are also increasingly partnering with Taiwanese drone companies. In 2024, the EU overtook the US as the main export destination for Taiwanese drones, with 1,323 units valued at USD 1.36 million. This figure rose significantly in Q1 of 2025, with exports reaching 2,982 units worth USD 1.72 million. The primary destinations for these exports were Poland, Germany, and the Czech Republic.
For Europe to help Taiwan significantly scale its drone production capacity, and to de-risk its own drone supply chains, the EU should make Taiwan a partner in the Readiness 2030 initiative. Originally launched as ReArm Europe in March 2025, the initiative represents the EU’s response to Russia’s invasion of Ukraine, aiming to rebuild Europe's defence industrial base and reduce dependency on the US. It offers affordable financing via SAFE loans and joint procurement mechanisms under conditions that products are manufactured in European or partner countries. Countries such as Canada and the UK have already joined, granting them access to the SAFE loan facility, eligibility under EU local content requirements, and participation in joint procurement frameworks. If Taiwan were granted similar status, it could access affordable capital to invest in its drone industry, while European governments would be able to purchase Taiwanese drones and jointly procure systems through streamlined EU frameworks. It is the logical next step toward deeper cooperation in the drone sector, which both Taiwan and its European partners have been pursuing.
This move would also accelerate the existing trend of European countries turning to Taiwan as a trusted supplier for drones. Taiwan’s non-Red supply chain strategy aligns with Europe’s growing emphasis on secure and democratic tech ecosystems, even if production costs are higher. Taiwan brings substantial technological strengths to the table, including world-class semiconductors for drone navigation and AI capabilities and cybersecurity standards. Inclusion in Readiness 2030 would also help address the structural scaling challenge of limited foreign government procurement of Taiwanese drones. Europe may lack the military muscle to directly deter aggression in the Taiwan Strait, but through Readiness 2030, it has the financial muscle to help Taiwan build the drones necessary to defend itself.
DISCLAIMER: All views expressed are those of the writer and do not necessarily represent that of the 9DASHLINE.com platform.
Author biography
Thijs Stegeman is a PhD Candidate at NDHU, Taiwan, focused on China's regional foreign policy and Taiwanese politics. Image credit: Flickr/Taiwan Office of the President (cropped).