Taipei: 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 significantly, with expectations to increase further, highlighting the strategic importance of Taiwanese collaboration in the defense sector.
According to Focus Taiwan, Shield AI has established a permanent presence in Taiwan, employing nearly 10 people and collaborating with local companies such as Aerospace Industrial Development Corp., the National Chung-Shan Institute of Science and Technology, and Thunder Tiger Corp. Maximilian Chen, Shield AI's director of government relations for Asia, noted the increase in Taiwan's contributions to the company's aircraft, expecting the share of materials and components sourced from Taiwan to reach 25 percent soon.
The integration of Shield AI's Hivemind autonomous piloting software with Taiwanese platforms showcases the technical collaboration between the two. AeroVironment, another U.S. defense contractor, has sourced over US$20 million in components from Taiwan over the past three years and is working closely with Taiwanese partners on its Switchblade 300 loitering munition.
Taiwan's evolving role from a supplier of individual components to a partner in the development and integration of autonomous systems is evident. However, expanding this role requires Taiwanese companies to standardize components and enhance system interoperability, as emphasized by Celine Fahn, AeroVironment's managing director for international business.
Trent W. Emeneker, CEO of Kill Zone, highlighted the challenge of establishing supply chains free from Chinese inputs, particularly for batteries, permanent magnets, and rare-earth materials. He noted the need for alternative mining, refining, and processing capacities. Emeneker also pointed out that U.S.-Taiwan cooperation lacks the production scale and operational readiness needed for widespread deployment of uncrewed systems.
Hota Industrial Mfg. Co. President Holly Sheng stressed the necessity of clear procurement volumes and the ability to integrate hardware and software into complete systems for Taiwan's manufacturing capabilities to translate into large-scale production. Sheng emphasized the importance of a feasible business model to encourage investment in the industry.