US Drone Makers Face Risks In Taiwan's 'Democratic Supply Chain' Efforts: 'Not Just Let's Swap Out Of China...It's Essentially Just A Delicate Business Environment'

Amid escalating geopolitical tensions, U.S. companies are increasingly cautious about engaging with Taiwan’s initiative to establish a “democratic supply chain.”

What Happened: U.S. firms are wary of collaborating with Taiwan due to China’s significant influence in the global drone market. Recent actions, such as China blacklisting U.S. drone maker Skydio, underscore these risks. Skydio experienced supply chain issues after being cut off from Chinese battery supplies following its sales in Taiwan, the Wall Street Journal reported on Monday.

In response, Taiwan is positioning itself as a potential alternative supplier. Vice Premier Cheng Li Chun has highlighted Taiwan’s efforts to develop a democratic supply chain. However, the ongoing geopolitical tensions between the U.S. and China complicate these efforts.

U.S. companies, including Empirium, are considering Taiwan as a substitute for Chinese components.

"It's not just let's swap out of China and go to Taiwan," CEO and co-founder Mike Sims said. “It's essentially just a delicate business environment."

Taiwan plans to heavily invest in its drone industry, but U.S. firms may still source parts globally to minimize risks.

Why It Matters: The collaboration between the U.S. and Taiwan to create supply chains independent of China is gaining momentum. A delegation of U.S. drone and anti-drone companies visited Taipei to explore partnerships with Taiwanese counterparts. This initiative aims to reduce reliance on Chinese components amid rising U.S.-China competition and security concerns.

Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.

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