TAIPEI — Taiwan and Japan have been steadily deepening cooperation in the drone industry, but a new report says their growing number of agreements has yet to translate into significant bilateral trade.
A study released by Taiwan’s Research Institute for Democracy, Society and Emerging Technology (DSET) found that Taiwan and Japan have signed at least 20 publicly disclosed memoranda of understanding involving drone technology, applications, markets and supply chains since cooperation began gaining momentum in 2017.
Yet actual trade remains surprisingly small.
In 2025, Taiwan exported just 45 drones to Japan, while Japan exported only three drones to Taiwan, according to data cited in the DSET report. The figures stand in sharp contrast to Taiwan’s overall drone exports, which reached 122,706 units in 2025.
The gap is raising questions about whether Taiwan-Japan drone cooperation can move beyond meetings and memorandums toward actual production, investment and recurring commercial orders.
From MOUs to real business
The DSET report, authored by policy analyst Hung-Yuan Teng, argues that the two sides now need to focus on concrete industrial cooperation.
According to the study, half of the publicly disclosed agreements between Taiwan and Japan were concluded in 2025, showing that cooperation has accelerated. However, the limited trade figures suggest that many of those relationships remain at the partnership or agreement stage rather than becoming large-scale commercial activity.
The report identifies several obstacles, including differences in regulatory systems, limited mutual certification and gaps in production and supply-chain integration.
Without mechanisms allowing products and components to be more easily recognized in each other’s markets, companies can face additional testing and certification requirements, increasing costs and slowing market entry.
Taiwan’s drone industry is expanding rapidly
The timing is significant because Taiwan’s domestic drone industry is growing quickly.
Taiwan’s Economics Ministry now expects the country’s drone industry to generate more than NT$50 billion in annual output by 2030, raising an earlier target of NT$40 billion after industry growth exceeded expectations.
The government is supporting the industry through technology development, testing facilities, regulations and domestic demand while encouraging companies to expand into international markets.
More than 200 Taiwanese companies have also been brought together through an international business alliance designed to help domestic manufacturers connect with overseas markets.
Taiwan still imports some important drone-related technologies and components, however. Officials have identified areas including thermal imaging, satellite positioning and communications technology as fields where domestic capabilities need to be strengthened.
The government has set a goal of increasing domestic production of key drone technologies and components to 90% by 2030.
Japan offers a potentially important market
For Taiwan, Japan represents a nearby advanced economy with established industrial networks and growing interest in expanding domestic drone capabilities.
But Japan’s own industry faces challenges. DSET cited data showing that Chinese-made drones account for a large share of Japan’s market, while domestic production remains comparatively limited. The study estimates that Japan produced about 940 industrial drones in 2024.
That creates a potential opening for closer cooperation between Taiwanese manufacturers and Japanese companies.
Rather than simply exchanging memorandums, DSET recommends greater cooperation involving investment, joint development, manufacturing and supply-chain integration.
Supply-chain security adds urgency
The wider global market is also changing.
The war in Ukraine has accelerated interest in drones and exposed the importance of reliable supply chains, while governments and companies in several countries are seeking to reduce dependence on Chinese-made components and diversify suppliers.
Taiwan is attempting to position itself as a manufacturing and supply-chain partner in that changing environment.
The Ministry of Economic Affairs says Taiwan’s advantages include manufacturing efficiency and an established industrial supply chain. Officials have also emphasized the need for Taiwanese companies to develop international markets instead of depending exclusively on domestic or government demand.
For Taiwan and Japan, that means the next stage of cooperation could depend less on signing additional agreements and more on whether existing partnerships generate measurable commercial activity.
The next step: turning cooperation into production
DSET’s central message is that Taiwan-Japan drone cooperation has reached a point where agreements alone are no longer enough.
The report calls for stronger institutional cooperation, closer coordination between manufacturers and the development of mechanisms that can reduce regulatory barriers.
If those measures advance, the relationship could evolve from a collection of bilateral agreements into a more integrated regional industrial network.
For now, however, the numbers tell a different story: Taiwan and Japan have built a growing framework for drone cooperation, but the actual flow of products between them remains remarkably small.
The question now is whether the two sides can turn that extensive network of agreements into the kind of sustained trade and industrial cooperation that Taiwan’s rapidly expanding drone sector is seeking.
WWC ONE MEDIA G,A
