As Ukraine seeks to edge China out of its drone supply chain, Taiwan emerges as a quiet player
Over the four years that Ukraine has been fighting to repel Russian forces from its territory, its country’s battlefields have become scarred by airstrikes, pockmarked by artillery fire, and littered with the wreckage of cheap aerial drones.
Over the four years that Ukraine has been fighting to repel Russian forces from its territory, its country’s battlefields have become scarred by airstrikes, pockmarked by artillery fire, and littered with the wreckage of cheap aerial drones.
The conflict has transformed the economics of modern warfare – with both sides now reliant on these unmanned aerial vehicles (UAVs) to monitor the battlefield, evade defences and strike deep into enemy territory. The fighting has so far kept Russia bogged down, trapped behind frozen frontlines, allowing Kyiv to remake the country’s industrial base to meet the needs of the war.
Now Ukraine has a new target – to free its drone supply chains of components from China, even as it attempts to ramp up production to meet its army’s growing needs.
Despite repeated denials from Beijing, Ukraine accuses China of aiding its ally Russia with military goods. Amid broader concerns about China’s dominance of industrial supply chains and the security risks that could entail, Ukraine – as well as Europe, the US and other countries – have increasingly turned to Taiwan as an alternative supplier.
Taiwan’s reputation for excellence in technology and particular expertise in microelectronics, navigation systems and batteries – areas in which western suppliers have struggled to compete – make it a favoured alternative source for Ukrainian drone manufacturers, according to the Snake Island Institute (SII), an independent Ukrainian thinktank.
Taiwan appears ready to meet the moment – with its president, Lai Ching-te, promoting a US$40bn supplementary defence budget that includes funding for drones and the integration of artificial intelligence.
Taiwanese drone exports to Europe surged more than 40-fold in 2025, with Poland and Czechia among the largest markets, according to the Research Institute for Democracy, Society and Emerging Technology (DSET). The trend continues to grow – exports in the first quarter of 2026 have already surpassed last year’s total.
Most of the drones were intended for onward transfer to Ukraine, according to interviews conducted by DSET, with these countries acting as intermediaries.
“We have components that are made in Taiwan, and that is not unusual in the industry now,” says Bohdan Diorditsa, chief international alliances officer at Vyriy, one of Ukraine’s leading drone makers that has been vocal in pushing for local production and reducing reliance on Chinese components that still dominate global supply chains.
He says fears that China might further tighten export controls were behind the search for alternatives. Taiwan, with world-class strengths in semiconductors and electronics integration, is a “100% a valuable partner”, Diorditsa says.
Ultimately, localisation remains Ukraine’s primary focus, says Artur Savchii, an analyst at the SII thinktank.
Each year of the war has pushed production further inward: from mainly importing Chinese finished drones to assembling them almost entirely domestically. By last year, Ukraine had more than 100 manufacturers of components on its shores, according to Ukraine’s ministry of defence. Ukrainian companies are also tailoring systems specifically for frontline combat in ways that mass-market Chinese suppliers often cannot, Savchii says.
But even as domestic assembly expands, Ukraine is unlikely to scale up drone production without any Chinese components in the near term, largely because Chinese-made parts remain significantly cheaper and more widely available. Even components produced elsewhere, including lithium batteries and rare-earth magnets, often still rely on Chinese materials.
Taiwan is also hardly free from the same dependency problem. China remains its biggest source of drone imports, although the customs figures include civilian and commercial models rather than solely military systems. Taipei has pledged to build a fully “non-red” drone industry by 2027 and wants to produce a third of the rare-earth magnets it needs by 2030. However, those transitions remain a work in progress.
The scale of what Taiwan can offer remains a limitation as well; Ukraine’s wartime needs are vast, with demand measured in millions of drones a year. Taiwan’s current output is far smaller, still in the hundreds of thousands, according to the customs administration.
Chinese products also retain a clear advantage in price, with some models costing only a fraction of their Taiwanese equivalents, says Gene Su, general manager of Thunder Tiger, one of Taiwan’s biggest drone-makers. His company has sent drone systems to Ukraine for field testing.
“They test it, they like it, but they don’t buy it because it’s still too expensive,” Su says.
Geopolitics is another obstacle. Ukraine does not formally recognise Taiwan and maintains cautious ties with China, which remains its largest trading partner. As a result, much of the cooperation appears to flow indirectly through intermediaries in Poland, Czechia, and the US. There is little sign of formal government-level coordination, with most engagement taking place business-to-business.
Taiwanese companies remain nimble though; some drone companies have established local facilities in Lithuania and Poland to better serve Ukraine, while a government body to promote the industry has signed memorandums of understanding with five European countries.
As demand for AI-driven drones grows on the frontline, experts and suppliers see potential for deeper Taiwan-Ukraine cooperation. Taiwan’s ministry of economic affairs has pledged to support seven hi-tech companies with about NT$326m ($10m), to develop drone-specific chips.
For Ukrainian manufacturers such as Diorditsa, the decision of where to source components will come down to wherever is best for the military. It is a combination of strategic thinking about supplier countries and considerations of efficiency.
“We build weapons not under market pressure or energy pressure,” he said. “We’re under pressure to survive.”
