Demand for Military UAVs Continues to Rise with Global Market Scale Forecasted to Reach $19.7B in 2023

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According to TrendForce’s research, the scale of the global market for military unmanned aerial vehicles (military UAVs, also known as military drones)will expand at a CAGR of 27.6% during the 2022~2025 period, from US$16.5 billion to US$34.3 billion. This growth is the result of countries worldwide engaging in the R&D, procurement, and deployment of this kind of military equipment. The rising demand for military UAVs is also expected to bring more business opportunities to technology companies in Taiwan as the extent of their specialties not only encompasses components and parts but also whole vehicle systems. Going forward, Taiwan-based companies that offer solutions in the field of military UAVs will benefit from domestic demand generated by government policies. They will also have a chance to enter the international market for this kind of hardware.

TrendForce points out that the Russia-Ukraine conflict has demonstrated the effectiveness of military UAVs in combat. Besides providing immense capability for asymmetrical warfare, UAVs are shown to have a significant advantage over conventional weapons such as fighter planes and tanks in terms of the amount of time needed for outfitting, loading armaments, and initiating attacks. Moreover, military UAVs are able to stay in the sky many times longer than conventional military aircrafts, as observed in their performances in missions related to long-range reconnaissance and airstrike. On top of all these, the most important reason for using UAVs is the reduction of casualties on one’s own side while substantially improving the combat capabilities of small military units. In modern warfare, where precision in attacking targets and minimal casualty rate are emphasized, military UAVs have now emerged as the general trend.

Many countries are now learning from the ongoing Russia-Ukraine conflict and will most likely make UAVs a key part of their respective strategies for national defense and military equipment acquisition. Some of them might even consider setting up a dedicated unit for operating battlefield drones, as in the case of Ukrainian armed forces. For the major military powers and regions affected by intense geopolitical tensions, their demand for UAVs is going to get higher. Presently, military UAVs are mainly purposed for target tug, reconnaissance, communication support, and airstrike. As the related technologies continue to advance, military UAVs will have a greater participation in missions involving electronic warfare, aerial refueling, and airborne early warning. Their role as loyal wingman will also be strengthened with reconnaissance and airstrike as the key points of focus in their next phase of development.

Among Taiwan-based companies that are developing a presence in the field of UAVs, Thunder Tiger is a long-established manufacturer for whole vehicle systems. Its offerings include multi-rotor UAVs and medium- and large-sized unmanned helicopters. The company also builds unmanned underwater vehicles (also known as unmanned submarines and underwater drones). All in all, its solutions can meet a wide range of application demand, such as photography/cinematography, surveillance, reconnaissance, patrol, communication support, and emergency assistance. Furthermore, Thunder Tiger is currently involved in the development of the T-400 unmanned helicopter that is geared towards communication support and reconnaissance. The T-400 is noted for attaining a combat radius of 200 kilometers.

Another Taiwan-based manufacturer named GEOSAT has also been developing remote-piloted aircrafts for civilian and military applications. The types of UAVs that this company offers include fixed-wing drones, multi-rotor drones, and unmanned helicopters. Like Thunder Tiger, GEOSAT has provided solutions for many applications, including photography/cinematography, surveillance, reconnaissance, patrol, crop spraying, etc.

With regard to key components, the growing demand for military UAVs will generate many opportunities for suppliers. In Taiwan’s semiconductor industry, potential beneficiaries are SoC suppliers such as MediaTek, image processor suppliers such as Novatek, and microcontroller suppliers such as Nuvoton and Holtek. In the field of cameras and related optical technologies, local companies including Asia Optical and JMO could see gains from participating in the development military drones. Additionally the demand for antenna-related solutions could be met by INPAQ.