The largest US drone maker struggles with supply chain disruption after selling drones to Taiwan's fire departments, with current inventory projected to last until spring 2025.
Sources indicate Skydio has sought assistance from Taiwan's Vice President Lai Ching-te and US Deputy Secretary of State Kurt Campbell while exploring battery suppliers across Asia.
China's Ministry of Foreign Affairs imposed sanctions on Skydio, its chief executive Adam Bry, and other companies, citing US arms support for Taiwan as a violation of the One China principle. The ministry ordered TDK's Dongguan subsidiary—Skydio's sole battery supplier—to halt operations before alternative sources could be secured.
In response, CEO Adam Bry condemned China's actions as weaponizing supply chains to benefit Chinese firms. While affirming Skydio's commitment to Taiwan, he emphasized the company's substantial investments in developing a non-China drone supply chain, with batteries remaining the final dependency. The company has restricted drone sales to one battery per unit, implementing extended customer support until full supplies resume in 2025.
Industry observers view Beijing's sanctions as a strategic move to strengthen DJI, a leading Chinese drone maker. Concurrently, the EU proposed sanctions on Chinese companies accused of supplying drone components to Russia, while the US advanced anti-Chinese drone legislation.
Having pivoted to enterprise and government markets, Skydio has provided drones to Ukraine and strengthened defense partnerships, with military clients accounting for over half of its US$1.2 billion backlog. Linse Capital projects US$180 million in revenue for 2024, up from US$100 million in 2023.
To bolster its position, Skydio secured US$170 million in November, in a funding round led by KDDI and Axon, aimed at scaling operations and advancing hardware and software development, maintaining its competitive edge despite geopolitical challenges.
