Germany is hoping to buy more drones from Taiwan as an alternative to China. But many financial and political hurdles are slowing down Berlin's trade ties with Taipei.
For German companies looking to diversify their supply of drones beyond China and bypass its dominance of the global drone market,Taiwanis starting to look increasingly attractive.
Areport published this month by DSET, a Taiwanese think tank focusing on democracy, society and emerging technology, shows thatGermanyhas become the second-largest importer of Taiwan-made drones in the first quarter of 2025.
"We are trying to become more independent from China [regarding drones]," Verena Jackson, a researcher at the Center for Intelligence and Security Studies (CISS) at the University of the Armed Forces of Germany, told DW.
Beijing sees Taiwan, a self-ruled island, as a breakaway province, and is activelydiscouraging diplomatic and trade ties between Taipei and other nations.
Due to Germany's close economic cooperation withChina, Beijing is likely to bristle at the idea of Berlin turning to Taiwan-made drones or key components as alternatives to Chinese ones.
Although China still dominates the drone market with an estimated 70-80% share of worldwide production, Taiwan is emerging as "a rising star" in the supply chain, Jackson said.
"The advantage for Taiwanese companies is that we are trying to do everything China-free. That has a very big attraction for our European partners," Hong-Lun Tiunn, Deputy Director of the National Security Program at DSET, told DW.
Since 2022, Taiwan has stepped up its efforts to develop its own drone industry and build a "non-red" supply chain, a reference to manufacturing networks that are independent of China's influence.
This is part of Taipei's defense strategyagainst a potential invasion by Beijing.
In a wartime scenario, Taiwan could be subject to a Chinese blockade with no shipping access.
"So we need to have our own capacity to manufacture all kinds of (drone) components," Tiunn said.
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Since the second half of 2024, Europe has overtaken the United States as the primary export destination for Taiwanese drones, according to the DSET report.
This shift came as China tightened export controls on drones and components, particularly those with military or dual-use capabilities, citing its own national security concerns.
But many analysts believe the shift is largely driven by mounting pressure from the West over China's ties to Russia.
"Europeans are trying to reach defense autonomy and they want to manufacture their own weapons or drones," Elizabeth Sun, a Berlin-based research fellow at DSET, told DW.
In December, the European Union announced sanctions on four Chinese firms for "supplying sensitive drone components and microelectronic components" to the Russian military.
During her visit to Beijing last year, Germany's then-Foreign Minister Annalena Baerbock warned that drones from Chinese factories "attack peace in the middle of Europe" and "hurt our central security interests."
CISS researcher Jackson also pointed out that sinceRussia's full-scale invasion of Ukrainein 2022, Germany has come to realize "there is an imminent risk coming from China when it comes to cybersecurity or drones."
However, Berlin does not share Taipei's ambition of establishing a fully China-free drone supply chain.
"We are very reliant on Chinese drones as a whole, as full drones, but also on parts," Jackson said.
She added that cutting China ties entirely would be unrealistic,especially given the country's dominance in raw materials like rare earth elements, which are crucial components in drone technology.
Instead, Germany is attempting to diversify key components such as software, sensors, and chips — areas that carry higher national security risks.
Software updates, for instance, are subject to data leaks.
"There's basically an open door where all information can go out of Germany and then go to foreign intelligence services," Jackson said.
This is where Taiwan — home to some of the world's most advanced chip manufacturers and a strong IT sector — could step in.
Although Taiwanese companies only hold a small share of the German drone market, "the components we are trying to provide [to Germany] are motors and chips, the very key parts, and our system integration experience," Tiunn said.
While established corporations have long-standing ties with Chinese suppliers, drone production is now surging across southern Germany and startups are increasingly open to partnering with Taiwan, Jackson pointed out.
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Earlier this month, Taiwan signed a partnership deal with US and German-based Auterion for drone software that has been battle-tested in Ukraine to help step up its defenses against growing military threats from China.
As it aims to provide drones and key components to other democracies, Taiwan is struggling to meet its own demand.
The island set a goal for domestic manufacturers to produce 180,000 drones per year by 2028. But the current annual production capacity — between 8,000 to 10,000 units — falls well short of that target.
This gap is due to the high cost of "China-free" drones, low domestic procurement, and minimal foreign government orders, according to the DSET report.
Cathay Fang, a policy analyst in the National Security and Economic Security Research Program at DSET, noted that the current priority is improving the cybersecurity of Taiwanese drones in line with US security initiatives for Unmanned Aerial Systems (UAS).
This focus could help open up the European market. "When we see that the United States and Taiwan are collaborating closely, German companies would certainly follow," Jackson said.
But Germany is facing its own challenges in reducing its reliance on Chinese drones and key components.
"Our procurement laws are really cost-focused. And China is still the most cost-effective country," Jackson said. "It takes time to implement also cybersecurity or security aspects."
Last year, the German army reportedly eased procurement procedures for small commercial drones from Chinese companies, including DJI, the world's largest consumer drone manufacturer.
This shows that, despite growing concerns from security analysts, the political will in Germany to address the potential risks of using Chinese drones remains limited.
"It's developing — the awareness here and the urge to do something about it. But it's certainly not at the point where it's sufficient," Jackson said.
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