U.S. defense firms increase Taiwan sourcing for autonomous systems

Taipei, Sept. 3 (CNA) Taiwan is playing a growing role in the supply chains of U.S. defense technology companies developing drones and autonomous systems, industry representatives said Thursday.

Taiwan's share of the materials and components used in Shield AI aircraft has risen from less than 1 percent in 2024 to 16 percent and could reach 25 percent in the near future, said Maximilian Chen, the company's director of government relations for Asia.

Shield AI established a permanent presence in Taiwan last year and now has nearly 10 employees in the country. It is also working with Aerospace Industrial Development Corp., the National Chung-Shan Institute of Science and Technology and Thunder Tiger Corp.

"If you want to be the best partner, you have to be close to your partner," Chen said during a panel at a forum hosted by the Research Institute for Democracy, Society and Emerging Technology (DSET) and SEMI Taiwan in Taipei.

The company has also integrated its Hivemind autonomous piloting software with Taiwanese platforms, with Chen saying its technical integration with Thunder Tiger took about six weeks.

Meanwhile, AeroVironment has sourced more than US$20 million worth of panels, sensors, batteries and other components from Taiwan over the past three years, said Celine Fahn (范家瑋), the company's managing director for international business.

The U.S. defense contractor, which is working with Taiwanese partners on its Switchblade 300 loitering munition, hopes to develop and manufacture additional systems in Taiwan, Fahn said.

The growing cooperation indicates that Taiwan is moving beyond supplying individual components toward greater involvement in the development and integration of autonomous systems, Fahn said.

Expanding that role, however, will require Taiwanese companies to standardize components and improve system interoperability so their products can be integrated with U.S. and allied defense systems, Fahn said.

Another challenge is establishing supply chains free of Chinese inputs, said Trent W. Emeneker, CEO of Kill Zone and former Blue UAS lead at the U.S. Defense Innovation Unit.

Batteries, permanent magnets and rare-earth materials are particularly difficult to replace because doing so requires alternative mining, refining and processing capacity, Emeneker said.

U.S.-Taiwan cooperation also remains short of the production scale and operational readiness needed to deploy uncrewed systems widely, he cautioned.

"We don't have robots at scale. We don't have the training or tools that we need to use them at scale," Emeneker said.

Governments therefore need to provide predictable demand over several years so companies can justify investing in the production of millions of affordable air, ground and maritime systems, he added.

Hota Industrial Mfg. Co. President Holly Sheng (沈千慈) similarly said Taiwan's ability to manufacture components for drones and robots would not translate into large-scale production without clearer procurement volumes and companies capable of integrating hardware and software into complete systems.

"A feasible business model is very important so that people are willing to invest," Sheng said.