Is China-Free Manufacturing Even Possible?

by Benjamin Cook

China’s sanctions on U.S. drone maker Skydio have revealed a deep reliance on Chinese-manufactured components across the global electronics supply chain. Following a recent sale to Taiwan’s National Fire Agency, Skydio now faces severe constraints on its battery supplies, impacting both civilian and defense contracts. While Skydio has been working to diversify its sources, the reality is that achieving full independence is almost impossible. Even if Skydio manages to secure new suppliers, many of these parts, or the equipment that produces them, still trace back to Chinese origins.

For instance, while Skydio could find manufacturers globally to assemble critical components like flight control modules, each link in this chain often circles back to China, whether through raw materials, basic components like transistors and resistors, or the machines required for PCB production. To truly reduce reliance on China, Skydio and other U.S. companies would need to create an entirely self-contained supply chain—from raw materials to assembly—fully resistant to Chinese influence. This would require re-, near-, or friend-shoring every step of production, an undertaking that could take years.

China also has extensive influence over the consumer market, where DJI, a Chinese giant, dominates with affordable, high-quality drones that far outperform other brands on price and innovation. DJI’s vast market share and resource access allow it to rapidly iterate and improve its products, securing continuous market dominance. Skydio itself exited the consumer drone market years ago, unable to compete at DJI’s pace. This lack of competitiveness in the consumer space means U.S. companies lag in innovation, unable to match DJI’s consistent technological advancements.

For the U.S. to foster innovation and reduce dependency on Chinese tech, it must prioritize domestic consumer drone manufacturing. Without such support, U.S. companies will continue struggling to rival Chinese products and, by extension, face limitations in producing military-grade drones free from Chinese parts. Crucially, the way to keep military tech costs low is to ensure that producers also have a commercial market. When components are solely used in military capacities, production costs soar as assembly lines sit idle until demand peaks.

However, if these components—or their close equivalents—are in mainstream consumer products, economies of scale significantly lower the production costs. Skydio’s situation highlights the strategic and economic challenges in balancing supply chain security with competitive capability in a globalized, complex tech market.

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Benjamin Cook, Researching Ukraine

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