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Jul 17
US pressures Taiwan drone suppliers to relocate production as security rules tighten
The US is intensifying efforts to reshape the unmanned aerial systems (UAS) landscape, tightening oversight of the drone supply chain in a bid to reclaim technological leadership and fortify national security. At the center of this strategy is the Blue UAS Cleared List—a Defense Department-approved roster of drone makers deemed safe for government use. While inclusion isn't limited to US companies, industry officials say the criteria have quietly expanded to favor American-made drones, pushing foreign suppliers to bring production stateside if they want access to the lucrative US market.
HY Tech unveiled its SkyVTOL 2 electric long-range drone, highlighting Taiwan's growing capabilities in unmanned aerial vehicle development as the island seeks to strengthen its defense industry. The Taipei-based company's latest model can carry 5-kilogram payloads for logistics applications while also serving potential military reconnaissance roles.
The US Commerce Department launched investigations into imports of drones, parts for unmanned aerial vehicles, and polysilicon, a key material for solar power, setting the stage for possible tariffs on those goods.
After years of holding SpaceX's Starlink at arm's length over concerns about its China-linked supply chain and government control over foreign corporate operations, Taiwan is signaling a shift: officials are now welcoming the satellite internet giant to enter the local market and support the island's next-generation communications infrastructure.
A wave of next-generation defense contracts from the US Department of Defense is poised to transform the global unmanned systems industry in 2025, and Taiwan may play a pivotal role. With the Pentagon expected to release a large volume of unmanned vehicle orders next year, US defense tech startups are racing to secure production capacity. Many of these firms, while brimming with innovation, face significant constraints in manufacturing scale, opening the door for Taiwan's precision-driven, China-free supply chain.

Taiwan's government-backed low-Earth orbit (LEO) satellite initiative—part of its Beyond 5G (B5G) communications technology roadmap—is facing mounting challenges, with progress on planned satellite launches and communications testing now uncertain. Despite plans to deploy six experimental satellites, officials acknowledge that the program is unlikely to evolve into a commercially viable system.

Sun Yad Group operates across construction, biotechnology, materials, healthcare and drones in a diversified conglomerate worth NT$17 billion (US$583 million). Chairman Yu-ming Chang transformed the company from a traditional synthetic leather producer into Taiwan's multi-industry player through strategic acquisitions and vertical integration.

As global demand for unmanned aerial systems accelerates, Taiwan is positioning itself as a potential cornerstone in the Pentagon's Replicator initiative—a program launched in 2023 to deploy thousands of small, low-cost, and reusable drones by 2025.

As the global low-Earth orbit (LEO) satellite industry enters a phase of rapid commercialization, demand for high-frequency communication components continues to climb. Taiwanese RF component maker Universal Microwave Technology (UMT) reported a revenue dip in June but remains cautiously optimistic about long-term growth, citing strong demand and a robust pipeline of LEO-related orders.
China's Ministry of Commerce on Wednesday added eight Taiwanese defense contractors to its export control entity list, marking Beijing's latest effort to pressure the island's military-industrial complex despite minimal existing commercial relationships.
China is turning up the heat on Taiwan's defense sector—but the immediate fallout may be limited.

Amazon's satellite internet venture, Project Kuiper, is accelerating its expansion into Asia, with a focus on South Korea, Taiwan, and Japan — three strategically vital nations amid rising demand for resilient communications infrastructure and growing competition in low-Earth orbit (LEO) connectivity.