The export column looks like a breakout. Ministry of Finance figures in a September DSET report put complete-drone shipments at 3,472 units in 2024, 122,726 in 2025 and 191,373 in the first half of 2026. First-quarter 2026 export value was already reported above the whole of 2025, with the Czech Republic taking the bulk, much of it described as pass-through toward Ukraine, then Poland and the United States. Taiwanese battery makers told DSET they were sending five to seven million drone cells a month into that war, mostly high-density NMC packs that survive a Ukrainian winter. Ukraine’s customs list put Taiwan third as a battery supplier in 2025, behind China and Vietnam, up from 24th in 2019. Assembly is no longer the question. The question is what is inside the box.
DSET’s own audit is blunt. Dependence on Chinese battery cells in Taiwan’s drone industry fell from about 70 percent in 2024 to about 50 percent in 2025. That is progress and still a coin flip. Upstream of the cell, China still holds roughly 65 percent of NMC cathode active material, 95 percent of cathode precursors, about 97 percent of anode active material and 95 percent of battery-grade graphite processing. In 2025 Beijing added export controls on processing technology, cells and precursors and sanctioned eight Taiwanese defence-linked firms. Non-Chinese electrode material is quoted 40 to 50 percent dearer. A 'non-red' pack assembled in Taiwan can still be a Chinese chemistry with a local wrapper. Executive Yuan procurement rules want government drones and parts non-red or domestic from January 2027. The guidance grades airframes and modules. It is weaker on the powder that goes into the cell.
Magnets and motors are the second hidden ledger. Brushless motors that snap a small UAV through a turn need neodymium magnets. China refines on the order of 90 percent of that metal. Substituting a non-Chinese motor has been costing from double to ten times, and 2025 rare-earth controls briefly multiplied some defence-component prices. Radios, flight-controller chips, GNSS and imaging silicon, and the two software layers are AI flight control and ground-station autonomy are the 'three chips and two software' DSET says Taiwan still buys abroad. Cameras and gimbals can be assembled on the island. The sensor and the codec often are not. A resilient chain would mean qualified non-Chinese CAM and graphite, magnet metal that is not a single-country refined product, a flight-control chip that can be packed outside a coerced foundry, and a radio that still works when the export licence is pulled. None of that is a quarterly export spike.
Foreign government orders have not hardened behind the unit count. DSET’s September paper said stable official demand outside the United States remains small. Commercial and pass-through volumes can vanish when a war pauses or a customs code is reclassified. Stockpiles, allied offtake and a premium paid for ugly, expensive, non-Chinese powder are what turn an assembly into a materials shortage. Until the cathode, the magnet and the radio have a second address, Taiwan can build drones. It cannot yet promise they will fly if the strait closes the invoice.