US Drone Maker Skydio Faces Critical Supply Chain Crisis After Chinese Sanctions

, America’s largest drone manufacturer and a vital supplier to ‘s military, is grappling with an unprecedented supply chain crisis after Beijing imposed sweeping sanctions, blocking access to essential components, according to the Financial Times.

Supply Chain Disruption Threatens Operations

The San Mateo-based company has been hit particularly hard by the disruption to their battery supply chain. Their sole battery provider, Dongguan Poweramp (a TDK subsidiary), was directly ordered by Chinese authorities to sever all ties with Skydio. In response, the company has been forced to implement strict rationing of batteries supplied with drones and doesn’t anticipate securing new suppliers until spring 2025.

“This is a clarifying moment for the . If there was ever any doubt, this action makes clear that the Chinese government will use supply chains as a weapon to advance their interests over ours,” said Skydio CEO Adam Bry in a note to customers.

He further emphasized that “This is an attempt to eliminate the leading American drone company and deepen the world’s dependence on Chinese drone suppliers.”

Critical Role in Military and Emergency Operations

The timing of these sanctions is particularly concerning given Skydio’s crucial role in military and emergency operations worldwide. The company has already delivered more than 1,000 drones to Ukraine, where they’re being used for critical intelligence gathering and reconnaissance missions, as well as documenting potential war crimes.

Their latest X10 model has achieved a significant milestone as the first US drone to successfully pass Ukrainian electronic warfare tests, demonstrating superior resistance to jamming attempts. This achievement has led to Ukraine requesting thousands more units.

Beyond military applications, Skydio has established itself as a key player in emergency services, recently securing an important contract with Taiwan’s fire agency. The company also maintains substantial supply relationships with the US military and numerous corporate customers, making the supply chain disruption particularly far-reaching.

Aggressive Pursuit of Solutions

Skydio isn’t taking this crisis lying down. The company has launched an aggressive campaign to address the situation on multiple fronts.

CEO Adam Bry has engaged in high-level discussions with US government officials, including a significant meeting with Deputy Secretary of State Kurt Campbell and senior officials. The company is actively exploring new supplier relationships throughout , with a particular focus on Taiwan. They’ve also initiated discussions with Taiwan’s vice-president Hsiao Bi-khim, seeking support and potential solutions.

“We suspect Skydio was targeted by Beijing because it is likely seen as a competitor to DJI,” said a US official, according to the FT. “If there is a silver lining, we can use this episode to accelerate our work to diversify drone supply chains away from . . . .”

The sanctioning occurred on October 11, as part of China’s retaliation against ‘s approval of attack drone sales to Taiwan. The timing was particularly challenging for Skydio, as it came before they had successfully established alternative supply chains.

“While China’s sanctions today target defence and drone manufacturers, tomorrow they will almost certainly expand to other sectors as US-China relations worsen. Batteries and rare earths are just the canary in the coal mine.” Explained Craig Singleton at the Foundation for Defense of Democracies.

DroneXL’s Take

This developing situation underscores the growing importance of supply chain independence in the drone industry. The crisis emerges at a pivotal moment when Congress is actively considering legislation to ban American use of DJI drones, highlighting the critical need for robust domestic drone manufacturing capabilities.

While initially disruptive, this aggressive move by China might serve as the catalyst needed to accelerate the development of alternative supply chains and strengthen the US drone industry’s independence. The situation also reveals the broader implications for US-China technology relations and the urgent need for diversified supply chains in critical technology sectors.

We’d love to hear your perspective on this developing situation. How do you think this will impact the future of drone manufacturing in the US? Share your thoughts in the comments section below.

Photo courtesy of Skydio.


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Haye Kesteloo
Haye Kesteloo

Haye Kesteloo är chefredaktör och grundare av DroneXL.co, där han täcker alla drönarrelaterade nyheter, DJI-rykten och skriver drönarrecensioner, och EVXL.co, för alla nyheter relaterade till elfordon. Han är också en av värdarna för PiXL drönarutställning på YouTube och andra podcastplattformar. Haye kan nås på haye @ dronexl.co eller @hayekesteloo.

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5 Comments

  1. This article underscores the consequences of the U.S. government’s silly decisions to restrict DJI’s access to the American market. While it’s crucial to address security concerns, banning the most widely adopted and technically advanced platform before establishing a viable alternative has created vulnerabilities in the supply chain, hurting the U.S. drone industry as a whole. Skydio’s lobbying to remove DJI may have initially seemed like a competitive move, but it has ironically backfired, exposing the market to instability rather than fostering growth or innovation. Supporting a competitive environment with a diverse array of suppliers is critical to building resilience rather than relying solely on restrictive policies.

  2. Now, wasn’t it Skydio that was doing some sketchy false flagging of DJI when this all kicked off with the proposed DJI ban? Seems fair payback to be honest, and shows Skydio isn’t as ‘All American’ as it likes to claim if it’s reliant on Chinese supply chain.

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