Trend Tapestry Droning On: Taiwan drone exports are on the rise as the opportunity starts to materialize

Research evidence excerpt

Trend Tapestry Droning On: Taiwan drone exports are on the rise as the opportunity starts to materialize

Hannah L Lee AC Asia Pacific Equity Research

(852) 2800-8886 09 July 2026 J P M O R G A N

hannah.l.lee@jpmorgan.com

Taiwan Drones On

US$6.5bn funding for domestic drones on the table

We highlighted the growing emphasis on asymmetric defense in Taiwan, as well as

efforts to cultivate an indigenous drone industry in our earlier Trend Tapestry note here.

Since then, the opposition-dominated parliament has approved a NT$780bn (US$25bn)

supplementary defense budget earmarked for arms purchases from the U.S (link).

Notably, the final approved version of the special defense budget represented a scaling

back of the NT$1.25tn first proposed by President Lai, and excludes funding for

domestic defense programs, including drones.

To close the gap, the ruling Democratic Progressive Party (DPP) has in June proposed a

NT$210bn (US$6.5bn) special spending package to support drone purchases and

development out to 2031 (link). The proposal has been countered by opposition parties,

including by a general budget amendment put forward by the Kuomintang (KMT) in

which NT$240bn (US$7.5bn) will be set aside for drone procurement over six years

(link). The drone funding proposals are currently under review (link), but highlight

support remains for the development of a domestic drone industry in Taiwan.

Domestic drone production is scaling

Despite a delay in specific funding for the sector, the drone indsutry has shown rapid

growth since the inception of the Drone National Team, which brought together local

manufactuerers to fast-track the development and deployment of drones, in 2022 (link).

The value of the Unmanned Aerial Vehicle (UAV) industry in Taiwan has gone from NT