Electronic warfare has one structural limitation: it needs a signal to attack. Fiber-optic control emits no radio, satellite links bypass ground jammers, and AI terminal guidance needs no link at all for the final leg — three methods systematically defeating jamming, which is why defense is shifting toward interception. Taiwan carries an extra layer: a Control Yuan investigation documents the Ministry of National Defense revising its drone response SOP three times in two months, from "may shoot down" to "flare warning only, first shot requires the Minister's authorization" and back to "shoot down with 7.62mm or smaller." That is not a technology problem.
Taiwan's public drone money splits three ways: an approved NT$44.2B coordination program (R&D grants), a proposed NT$210B defense procurement special statute (stuck in cross-party negotiation), and annual agency budgets (NT$7.2B+ for 2026). The largest was written to run from 1 August 2026 — that date has passed with the bill still unresolved. And the Executive Yuan version buys only three specific items.
The global drone market is roughly US$69B in 2026 (IDTechEx). China holds about 80% of it (CSIS) and DJI over 70% of multi-rotor. The FCC put every foreign-made drone on its Covered List in December 2025; Taiwan's drone output jumped from NT$5.0B to NT$12.9B in one year, and Q1 2026 exports already beat all of 2025. This piece breaks down the five-layer supply chain, the four demand blocks, and the two ceilings holding back scale.
Of the 267 companies the Ministry of Economic Affairs counted, 164 are in northern Taiwan. But geography is not division of labor — Thunder Tiger's published bill of materials shows motors, batteries, frames, and propellers sourced locally, while flight control, comms/GPS, and camera modules go to US, European, and Japanese partners. Exports were only 23% of 2025's NT$12.9B output, and 88.1% of export value sits in the 2–7 kg weight band per Ministry of Finance statistics.