The Executive Yuan yesterday approved plans to invest NT$44.2 billion (US$1.44 billion) into domestic production of uncrewed aerial vehicles over the next six years, bringing Taiwan’s output value to more than NT$40 billion by 2030 and making the nation Asia’s democratic hub for the drone supply chain.
The proposed budget has NT$33.8 billion in new allocations and NT$10.43 billion in existing funds, the Ministry of Economic Affairs said.
Under the new development program, the public sector would purchase nearly 100,000 drones, of which 50,898 would be for civil and government use, while 48,750 would be for national defense, it said.
Photo: Ritchie B. Tongo, EPA-EFE
The Ministry of National Defense would fund its procurement through the special resilience budget, the proposal showed.
Meanwhile, the Cabinet would direct the economic ministry to establish an expert panel to provide policy guidance, with quarterly progress reports required.
Taiwan’s competitive advantages in the drone industry include a complete supply chain for information and communications technology drones, rapid and flexible production capacity, and a proven record of producing drones independent of Chinese-manufactured components, the economic ministry said.
The nation has about 250 drone manufacturers, whose combined output value was NT$5.05 billion last year, it said.
Taiwan has also signed eight memorandums of understanding to enter supply chains with other countries, including the US, Japan, the Czech Republic and Poland, it added.
However, key gaps in Taiwan’s supply chain include thermal cameras, laser rangefinders, GPS chips, ground control software, flight controller chips, and communications modules and chips, it said.
The industry still relies on imports for core components, while the small domestic market drives up costs, has insufficient testing sites, as well as a lack of industry standards and regulations, it said.
The economic ministry proposed four key policy directions for the government to boost domestic production:
First, it would expand domestic and overseas demand by using the local market as a testing ground, supporting firms through strategic investment and pursuing global opportunities via a “national team” alliance, it said.
Second, it would boost indigenous research and development, and international cooperation to improve supply chain autonomy, with plans under way for 50 domestic projects and 10 international joint projects, it said.
The government would subsidize research-and-development costs for flight controller chips, communication modules and artificial intelligence-powered flight control software, it said.
Third, it would create a cluster ecosystem, including an innovation and research center, and 18 testing sites, while the Chungshan Institute of Science and Technology’s Minsyong campus would host 100 drone production firms, it said.
The institute would establish labs in Tainan’s Shalun (沙崙) and Lioujia (六甲) districts to develop 26 drone models, the economic ministry said.
Fourth, it would amend regulations governing drones and uncrewed vessels, revise inspection standards, and establish procurement and certification systems, it added.
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