China has maintained a clear lead over the US in drone-related technology patents since 2016, highlighting a widening technology gap as Taiwan seeks to expand its domestic drone industry and reduce reliance on China-centric supply chains. The divergence underscores the scale of the challenge facing Taiwan at a time when governments worldwide are accelerating procurement of unmanned systems and reassessing supply chain security.

The Federal Communications Commission (FCC) will block the sale of foreign-made drones in the US, a decision believed to target Chinese market leader DJI and could prompt Taiwanese suppliers to accelerate investment in US manufacturing.

Taiwan-based circuit protection component maker Polytronics said its business likely hit a trough in 2025 and is poised for recovery next year, as US defense-related demand for thermal management substrates begins to return after tariff-driven order volatility disrupted shipments.

The US and Taiwan plan to accelerate military drone cooperation in 2026 as Washington advances a large procurement program and Congress moves forward with legislation calling for joint development. The efforts are expected to create opportunities for Taiwanese manufacturers in key technologies, supply chains, and overseas markets, according to industry executives.

Taiwan and the US plan to procure nearly half a million military drones over the next two years, a rapid buildup that is driving manufacturers to expand production, localize components, and secure testing facilities. The surge in demand is emerging as a key test of whether the drone supply chain can scale fast enough to support large defense programs.