AI image sensor chips have become a key market for Taiwan's IC design firms, with major players such as Novatek Microelectronics, Realtek Semiconductor, and Himax Technologies, as well as mid-sized companies including Sunplus Technology, Egis Technology, and Etron Technology, all stepping up their efforts. Among firms also pushing into drone imaging solutions, including Elan Microelectronics and PixArt Imaging, a broad consensus is emerging: compute power and price are not the real winning factors in this market.

Taiwanese drone manufacturer Jiin Ming Industry attended the launch press conference for the Japan-Ukraine Drone Cluster (JUDC) at the Foreign Correspondents' Club of Japan (FCCJ) in Tokyo. This marks the company's latest step in expanding its international footprint following its entry into the European market.

Coretronic's latest sales update signals a mixed picture for the global electronics market, with demand improving in energy-saving products but lingering weakness in imaging. For international readers, the results highlight how tariffs, exchange-rate swings, and geopolitical risks continue to shape supply chains and customer demand across devices worldwide.

Drones should be seen as "flying computers," and Taiwan has an edge in the drone market with its supply chain advantages, according to Thunder Tiger chairman William Chen. Moreover, since as much as 80% of drone components on the frontlines in Russia and Eastern Europe come from China, defense buyers in Europe and the US have become more concerned about the urgent need for "non-red" supply chains.

Global drone demand continues to heat up, and Taiwanese manufacturers are aggressively expanding overseas. Industry players say the market's most urgent focus has shifted from price and delivery time to competition among trusted supply chains.

With supply chain inventory normalization largely complete, Sonix Technology (Sonix) has seen business momentum recover. The MCU supplier is benefiting from resilient demand for microcontrollers used in medical monitoring devices and steady shipments of multimedia image-processing chips, giving it better order visibility for 2026 than in previous years. Meanwhile, the company's drone business has entered niche commercial and industrial applications, providing a stepping stone toward higher-end markets.

US drone maker AeroVironment has worked closely with Taiwan-based supply chain partners over the past three years, with the company noting that many of its product components are now co-developed and manufactured by both sides. Moreover, the defense tech company has also established a direct communication channel in Taiwan in recent years to support Taiwan's national defense resilience program.

Taiwan's legislature moved defense drone proposals to committee review on July 3 after heated debate, advancing plans to fund a domestic autonomous unmanned vehicles program and prompting a near-term boost in activity across the local drone supply chain. The Executive Yuan had approved a draft special act backed by a special budget of NT$210 billion (US$6.6 billion) for procurement of autonomous defense unmanned vehicles, and rival bills from the Kuomintang and the Taiwan People's Party were also sent to committee review.

Below are the most-read DIGITIMES Asia stories from the week of June 22-28, 2026:

To meet the aerospace industry's push for lighter, more environmentally sustainable next-generation aircraft, Taiwan's Aerospace Industrial Development Corporation (AIDC) has stepped up research and development of thermoplastic composite materials in recent years.

Taiwan's Executive Yuan has decided to draft a separate special bill to support drone development and procurement after the Legislative Yuan cut relevant items from the NT$1.25 trillion (approx. US$39 billion) special budget for national defense, with the Executive Yuan citing national security concerns and the need to build an autonomous industrial supply chain. The move comes as a delegation of lawmakers, led by Speaker Daniel K.Y. Han, returns from a visit to TSMC's Arizona plant and meetings with US lawmakers, yet it remains unclear whether that trip will help win opposition support for the drone bill.

Taiwan's Ministry of National Defense has revived a NT$210 billion (approx. US$6.6 billion) special bill for unmanned vehicle procurement after the Legislative Yuan in May 2026 stripped out all domestic-industry-friendly items from an earlier defense special budget, leaving only arms purchases. The Executive Yuan has now approved the draft, raising hopes and concerns across the drone industry.

Unmanned aerial vehicle (UAV) manufacturer Thunder Tiger recently participated in the Taiwan Expo in Europe 2026 in Warsaw, Poland, showcasing its combat solutions. It said European markets are prioritizing non-red supply chains. In addition to establishing a presence in Ohio, the company has obtained multiple certifications and is integrating with Taiwanese suppliers to build a non-Red supply chain ecosystem.

Taiwanese drone manufacturers are accelerating their expansion into overseas markets as domestic defense and program budgets remain unstable, executives said, making international sales the primary growth engine. Demand varies by region, and firms are increasingly emphasizing their non-China supply chains to address geopolitical concerns and customer requirements.

Amid growing localization efforts across China's supply chain, FineMat Applied Materials has seen its metal mask business continue to shrink and is accelerating its transition into AI cooling, semiconductors, and drones. The company's liquid-cooling cold plates for AI applications have already been sampled by end customers and are expected to begin shipping in the second half of 2026. Once volume production ramps in 2027, cooling products could account for more than 50% of total revenue, becoming a key growth driver.

AbonMax Technology said on June 16 that drone revenue still accounts for only about 7% to 8% of its total sales, but the company expects more visible operating results by the end of 2026 as government procurement orders and overseas expansion begin to take effect.

Taiwan-based carbon fiber composite maker Topkey is accelerating its expansion into high-growth technology sectors, with formal evaluations underway for applications in drones, industrial robots, and low-Earth orbit (LEO) satellites. The initiative marks a strategic step in the company's transformation from a traditional sporting goods supplier into a provider of advanced composite solutions for aerospace, electronics, and smart machinery.

In light of tensions concerning non-China supply chains, microcontroller unit (MCU) supplier Elan Microelectronics expects stronger performance in the second half of 2026 as new AI PC programs enter production following the newly established drone business.

Ubiqconn Technology reported consolidated revenue of NT$121 million (approx. US$3.84 million) for May 2026, down 7% from the previous month but up 2% year-over-year, marking a return to monthly revenue growth. Cumulative consolidated revenue for the first five months of 2026 totaled NT$799 million.

Taiwan's drone industry is set for a major milestone in the second half of 2026, as the Industrial Technology Research Institute (ITRI) has secured qualification from the Association for Uncrewed Vehicle Systems International (AUVSI) to serve as a Green UAS certification body. The move is expected to accelerate certification for complete drones and components, helping local suppliers enter the US and global markets faster.

Lockheed Martin's Skunk Works and Divergent Technologies introduced the Replicator, a 3D-printed unmanned aircraft prototype with a roughly 2.7 meter wingspan, after moving the concept to first flight-ready hardware in under 12 months. The effort showcased a digital manufacturing workflow designed to accelerate design-to-production timelines and explore multi-mission applications for next-generation defense systems.

Jiin Ming Industry showcased its tactical fixed-wing drone platform and related technologies at a Taiwan drone alliance event on June 9, 2026, presenting a flight-ready multirotor called VIPER and a fixed-wing system named SABER as it pursues overseas expansion into the US, Japan, Europe, and Southeast Asia with alliance support. The event, organized by the Taiwan Excellence Drone International Business Opportunities Alliance and convened in Taichung, gathered domestic drone firms, supply chain partners, and representatives from industry, government, academia, and research to discuss export and supply-chain strategies.