America seeks help from Taiwan... to break the grip of the drone industry

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In an effort to break free from dependence on China for the production of aircraft and drone boats, American defense companies have turned their attention to Taiwan to establish partnerships that combine American technology with Taiwanese industrial expertise.

As a translation of this trend, American and Taiwanese companies have signed at least 13 cooperation agreements since September 2025, including emerging and major companies, including Anduril Industries, whose drone supply contracts to Taiwan exceeded one billion dollars, according to the Wall Street Journal.

The partnerships are based on a plan approved by the Taiwanese legislature in August, to allocate about $7 billion, equivalent to approximately 10 trillion won, to purchase drones within six years.

This came amid concerns raised by US President Donald Trump's postponement of approval of a $14 billion arms deal to the island. In parallel, Washington launched a “drones dominance” program worth $1.1 billion.

However, despite the preference for American production, limited industrial capabilities prompt the use of partners, while Congress directed late last year to establish a joint program with Taiwan.

As for boats, the Taiwanese Ministry of Defense announced last December its need for 1,320 unmanned attack boats, and the Navy later requested $930 million for the project over six years.

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In preparation for the competition, Taiwanese shipbuilder CSBC evaluated about 10 American and European companies for more than six months, and chose Havok AI, which was founded by former naval aviation officer Paul Lewin of Rhode Island in 2024, to develop a joint bid.

The American company provides self-driving fleet management software, while the Taiwanese partner offers its shipbuilding expertise. Lewin believes that producing thousands of boats could deter invasion and prevent war.

In addition, this integration extends to a model that mimics “TSMC” for chips, where companies such as “Apple” and “NVIDIA” undertake the design, and Taiwan undertakes the manufacturing.

Palmer Lackey, co-founder of Anduril, said his business interest lies in designing in America and manufacturing in Taiwan, or co-designing and producing on the island.

In this context, the National Chung-shan Institute of Science and Technology agreed with Anduril last year to jointly produce the Barracuda-500 missile and underwater drones.

Virginia-based Street Industries also operates a development center in northern Taiwan and cooperates with a shipyard in Kaohsiung to provide local supplies that may be inaccessible in the event of a Chinese blockade.

The results are beginning to become clear for the company "Shield AI", which increased the share of Taiwanese components through its "Vbat" operation from less than 1 percent in 2024 to 16 percent, and is targeting 25 percent.

Its president, Brandon Tseng, said on October 2 that its radar allows it to operate near the Taiwan Strait despite cloud cover. The first aircraft was delivered to the Coast Guard this month, among 12 aircraft scheduled for the coming months, in a competition that was decided in July.

The aircraft was displayed at Taipei Port on October 7, and AIDC is responsible for logistics, maintenance and training.

In late September 2025, AFEX and Circus demonstrated a drone that would strike a ground target, with an American-designed chassis printed locally with 3D technology, a control system, processing board, and payload from Taiwan, and a local motor and battery.