US Defense Firms Anduril and Shield AI Expand Drone Supply Chain Ties in Taiwan

US Defense Firms Deepen Taiwan Drone Ties

American defense technology startups Anduril and Shield AI are increasingly sourcing drone hardware from Taiwanese suppliers and have established offices on the island. Executives and analysts cite a manufacturing base that offers quality, cost and ease of collaboration, alongside Taiwan's large appetite for military drones. Delegations from the United States, the Czech Republic, Denmark and Germany visited in the first half of 2026, and in early July the American Institute in Taiwan joined the Taichung city government to host a forum on drone and unmanned vehicle business opportunities.

Rapid Supply Chain Shift

Shield AI said Taiwanese components accounted for less than 1% of its product content two years ago, rising to 16% this year, with a target of 25%. The company opened its Taiwan office in Taipei 101 during the September 2025 aerospace exhibition, where it displayed a full-size V-BAT reconnaissance drone. Anduril added 15 Taiwanese suppliers in 15 months, saw direct purchasing grow 15-fold over the same period and hired eight local employees. Its Altius-600M anti-armor drone, sold to Taiwan through the US Foreign Military Sales program, went from contract signing to delivery in 13 months, marking its first overseas FMS case. Anduril buys motors, printed circuit boards, precision machined parts and injection-molded plastic components from Taiwan.

Contracts and Cooperation

In February 2026, Shield AI signed a contract with Taiwan's National Chung-Shan Institute of Science and Technology (NCSIST) to integrate its Hivemind AI platform into Taiwan-developed unmanned systems, a step aimed at moving drones from autopilot toward autonomous decision-making. Earlier, in September 2025, NCSIST signed a procurement contract with Anduril and Canada's AirShare, plus memorandums of understanding with AeroVironment and other American and European companies covering unmanned vehicles, counter-drone systems, missile integration and unmanned vessels. Anduril co-founder Palmer Luckey delivered a lecture at National Taiwan University in August 2025, saying Taiwan stands at the crest of a defense technology industrial revival.

Software Meets Hardware

DSET analyst Fang Yi-jan said foreign makers are drawn by government tenders, the supply chain and the prospect of pairing software with hardware. She noted Taiwan's strength in manufacturing and mass production while software remains a gap, pointing to Anduril's Lattice command system and Shield AI's Hivemind as examples of what Taiwan lacks. Many Taiwanese suppliers come from consumer electronics and bring deep experience in making small batches of varied prototypes. With AI and drones shifting toward edge computing, she said foreign firms will need Taiwan's chips even more, opening a different level of cooperation.

Sources: Storm Media · Wall Street Journal · Techmeme