Taiwan’s Unmanned Aerial Vehicle Industry Takes Off

For American Chamber of Commerce Taipei

At the biennial Taipei Aerospace and Defense Technology Exhibition (TADTE) held in August, the Taiwan-made products that most caught the eye of visitors were the unmanned aerial vehicles (UAVs) displayed by the Taiwan military-run Chung-Shan Institute of Science and Technology (CSIST), three private local manufacturers, and a handful of Taiwanese university teams. Exhibited were fixed-wing and rotor UAVs, as well as various UAV-related services.

topicsphotos 201310 taiwanbusinessThe show provided a glimpse into a small but promising local industry that has benefited from technology transfers in connection with both the development of Taiwan’s Indigenous Defense Fighter (IDF) and the original design manufacturing (ODM) of radio-controlled model aircraft for foreign firms. This emerging industry has also been greatly helped by the strong backing of domestic academic research institutions, and by Taiwan’s well-established supply chains for specialty materials and components. 

Sources in the industry agree that their best business prospects are likely to come from commercial rather than military sales, as the military primarily relies on its own development projects or procurement from abroad. The Taiwanese UAV companies’ current pool of customers is comprised solely of civilian government agencies and research institutions. But they hope for an eventual liberalization of regulations to clear air space for commercial-use UAVs, which would likely increase demand substantially.

One of the Taiwan manufacturers, Carbon-Based Technology Inc., located in Taichung’s Central Taiwan Science Park, promotes its UAVs and related services under the brand name Uaver. The company was established in 2007, and aside from UAVs produces carbon fiber products such as windmill blades, motorcycle parts, and cell phone accessories. Uaver was founded by engineers who had retired from CSIST, which serves as the main research and development institution for the Ministry of National Defense’s Armaments Bureau. 

According to Craig Wang, Uaver’s marketing chief, the key to Uaver’s successful UAV development was the technology transfer from U.S. defense industry suppliers to CSIST and the state-owned Aerospace Industrial Development Corporation (AIDC) in the 1990s for the production of the F-CK-1 “Ching-kuo” jet fighter, also known as the IDF. The F-CK-1 program came into being after Taiwan found that pressure from China was making it difficult for it to procure advanced fighter aircraft from the United States. 

“Actually, Uaver’s engineers weren’t the leaders in the Ching-kuo project, but assistants,” says Wang. He adds that many of Taiwan’s aviation technology companies were effectively built on expertise gained through the project. A prime example is AIDC, which is now manufacturing landing gear doors and pressurized doors for the Boeing 737 and 747.

The mainstays among Uaver’s products are the “Swallow” and the “Avian,” both battery-powered fixed-wing aircraft with wingspans of 100 centimeters and 160 centimeters respectively. The system set-up time is a quick 10 minutes, and both UAVs are launched with a bungee cord and recovered with a parachute. The two products can stay in the air for 40-50 minutes and 60-90 minutes respectively, with a communication range of up to 10 kilometers.

The flight track is defined by just a single mouse click on a Google Earth map, a feature found only in Uaver products, Wang notes. All components except the camera are designed by the company itself, and the whole unmanned aerial system (UAS) costs in the neighborhood of US$100,000, not including training, which is another US$6,500.

“Training from scratch to our ‘C’ rank certification takes three or four days, after which the pilot must first gain some experience before later returning for courses leading to Uaver ‘B’ and ‘A’ certification,” Wang explains. 
Uaver provides UAV services as well as products. Its customers include a number of local governments in Taiwan, which use the service mainly for surveillance after disaster emergencies. Uaver has an open contract with the Kaohsiung City government to check on infrastructure and remote villages after typhoons, when weather conditions are still too precarious for manned helicopters to take off. The firm has another such open contract with National Cheng Kung University (NCKU), which hosts an emergency response center for the Central Government. Wang says Uaver has so far conducted over 30 missions for these two clients, with the pay depending on the level of difficulty. As a rule, he says, UAV surveillance flights in Taiwan cost between NT$60,000 (US$2,000) and NT$120,000, while data analysis is charged extra. 

The company also has overseas customers. Malaysia, for example, bought two Uaver UAVs this year for mapping. In addition, Wang points to a growing demand for UAVs, particularly in rapidly developing China and Southeast Asia, where urban and even rural planners need to have the most up-to-date information to take into consideration the constant changes occurring on the ground, often literally overnight. A positive development for UAV providers is that mapping in many countries was previously the prerogative of the military but has recently been released to the private sector, Wang says.

Another country on Uaver’s customer list is South Korea, which has also purchased two Uaver UAVs. Wang notes that the Korean government aims to digitalize all of its maps of the country, and for that purpose a fleet of GPS positioning cars has been roaming the streets of Korea, with the UAVs used to complete the visualization.  

In addition, Russia has recently put down a deposit for two Uaver UAVs, also intended for mapping, and Wang says sales negotiations are close to completion with another Asian country for three to six aircraft. As the narcotics control bureau of that country recently lost a helicopter with a crew of five in a crash, UAVs are considered a very attractive option to search out opium fields or drug processing plants hidden in remote areas.

Gasoline vs. battery power

Whereas Uaver products are all battery-powered, Tainan-based Geosat Informatics and Technology Co. uses gasoline engines for its fixed-wing UAV, the “Sky Arrow 55” and “Sky Arrow 100,” while also employing battery-powered rotorcraft. The advantage of gasoline power is much greater endurance (between 3.5 and four hours) and flight distance (400 kilometers), with the theoretical drawback that a crash could cause a fire. But Fred Wang, the company’s Senior Assistant Vice President, says that risk is more remote than the chance of a car accident causing an inferno in nearby buildings. 

The “Sky Arrows” can produce images with a resolution as high as 10 centimeters per pixel, says Fred Wang. He puts the cost of a flight at about NT$80,000, including data processing, which is much cheaper than the NT$300,000 per half day typically charged for a manned helicopter, data processing excluded. 

“Employing a high-accuracy positioning system developed by National Cheng Kung University, we are the only Taiwanese UAV firm providing Geographic Information System (GIS) positioning services needed for accurate mapping,” Wang says. He adds that Geosat UAVs come with subsystems for azimuth accuracy and shock-proofing, imperative for high-quality data monitoring.

Wang emphasizes that Geosat excels at the integration of such subsystems, which after all is what the UAV business is all about. “Without such integration, the aircraft is a simple remote-controlled device, not deserving to be called a UAV,” he says. 

Geosat’s customer base is comprised mainly of government agencies and academic research teams, who need UAVs for land surveying and mapping. Many projects deal with urban planning, the development of industrial zones, and tourism. Wang explained that as market entry barriers and the learning threshold are high in the UAV business, Geosat’s strategy is to equip and train local agents so that the level of their service is similar to Geosat’s own. The company is also active abroad, selling the complete UAS, as well as providing related training. “Since sales growth cannot possibly be sustained with hardware alone, we believe that our Taiwan model of focusing on the distribution of complete UAS solutions – as opposed to merely selling UAVs – is the best way to enter international markets,” Wang says. 

Geosat is headed by General Manager Lo Cheng-Fang, who formerly held the same position at AIDC. The company’s pool of engineers is drawn from National Formosa University’s Graduate Institute for Aeronautical and Electronic Engineering as well as from NCKU’s Department of Geomatics.

Another participant in TADTE this year was Avix Technology Inc., but the Taichung-based firm is still in the process of perfecting the prototype for its helicopter UAV, the AXH-1400. Avix’s current principal business is ODM manufacturing of radio-controlled model helicopters for JR Propo, a major Japanese manufacturer of radio-controlled robots and model aircraft. But as the local engineers in the partly Japanese, partly Taiwanese team used to work at Uaver or CSIST’s UAV department, it appears that the firm sees its future in the helicopter UAV business. 

According to Cooper Chang, Principal Manager of Avix’s UAV program, AXH-1400’s main advantages are its very high payload capacity – up to 10 kilograms – and the capability to take off from very limited space, making it suitable for use on ships, for example. “Operators of fishing vessels on the high seas increasingly seek UAVs for fish-spotting and have approached us, as has Japan’s national broadcaster, NHK, which needs a capable helicopter UAV for its heavy, extremely high-resolution TV cameras,” Chang says. 

When offered on the market, the AXH-1400 will carry a US$10,000 price tag. This price covers only the actual UAV with servos and motor, but not the data link, ground control, auto pilot system, and other features. But Chang notes that the price is just one-tenth of the competing “Camcopter” from the Austrian company, Schiebel. 

Chang explains that Avix will be able to keep the price low because almost the entire supply chain is located nearby. Avix’s design office and R&D center are on the second floor of a non-descript two-story building in the Taichung countryside, while the precision plastic injection molding is done downstairs. The metal parts can be supplied on very short notice from CNC machining vendors in the surrounding area. Suppliers of the main material, aeronautical-grade carbon fiber, are also in the neighborhood, though for some extra-lightweight carbon fiber, Avix turns to Japan, Chang says.  

What Uaver, Geosat, and Avix have in common is the hope that one day soon Taiwan’s Civil Aviation Administration will permit domestic UAV flights for purely commercial purposes. According to Uaver’s Craig Wang, a new regulation is under consideration that would make mapping compulsory before and after all construction projects valued over NT$10 million (US$330,000). Given that government maps of Taiwan’s remote areas are often several years old and thus unsuitable, implementation of such a regulation would greatly increase the demand for UAV services. 

Some see the recent decision by the U.S. Federal Aviation Administration (FAA) to issue operating permits for civilian UAVs to an Alaskan-based company as a positive sign, given that previously the FAA – like the European Aviation Safety Agency – had always withheld approval for any UAVs flying beyond visibility range. Unlike Alaska, however, Taiwan is a highly densely populated area, raising safety concerns.

Yet even if approval for civilian-use flights doesn’t come any time soon, government demand alone is likely to keep Taiwan’s UAV providers busy. Boding well in this regard, the Environmental Protection Administration (EPA) recently gained some positive publicity when UAVs it had hired discovered illegal storage tanks at Taiwan’s sixth naphtha cracker complex. The news was likely to inspire other government agencies to explore how UAVs could help their operations.

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