Japan's defense establishment has committed to making the Self-Defense Forces the world's most proficient operator of unmanned systems — a goal that looks increasingly urgent given four years of drone warfare in Ukraine, and increasingly difficult given the gap between Tokyo's declared ambitions and its industrial output.
Japan's 10,000-to-1 Production Deficit Against Ukraine
Defense Minister Shinjiro Koizumi set the benchmark in March, calling on Japan's Self-Defense Forces to become "the world's organization most skilled at operating unmanned equipment." The 2026 edition of Japan's annual defense white paper formally lists AI, drones, electronic warfare, space, and cyberspace as the defining pillars of a new style of warfare.
The gap between that ambition and Japan's current output is stark. The Japan Industrial Unmanned Aircraft Industry Association surveyed its member companies and found that Japan produced approximately 1,000 drones domestically in 2024. The figure does not cover every Japanese manufacturer, but it broadly reflects the industry's current scale.
Ukraine, by comparison, produced around 4 million drones in 2025. President Volodymyr Zelensky stated on July 15 that Ukraine had already reached a production capacity of 10 million drones per year and hoped to push that figure to 20 million. Japan's ruling Liberal Democratic Party passed a proposal on June 9 setting a target of approximately 80,000 drones annually by 2030 — a goal that, even if met, would leave Japan producing less than 1% of Ukraine's current wartime output.
Japan's drone-related defense budget for fiscal 2026 has been set at approximately ¥277 billion — more than double the previous year's ¥111 billion. The government's economic security framework pairs that spending with a plan to establish domestic mass-production capacity for drones and key components by 2030.
The contrast in scale reflects something deeper than budget differences. Throughout the Russia-Ukraine conflict, drones have transformed from precision strategic assets into battlefield consumables. A small attack drone or FPV drone — one equipped with a first-person-view camera and piloted remotely by the operator — can cost a few hundred thousand to a few million yen, yet destroy equipment worth many times more. When one is lost, it is replaced immediately. When it is jammed, the operator changes the frequency. Ukraine's front lines have compressed what once counted as a development cycle into something closer to an overnight product revision: the boundary between a prototype and a production model has effectively dissolved.
Japan's defense industry built its reputation on the opposite model — high quality, long cycles, exhaustive verification at every stage. Adapting to the logic of drone warfare means learning to make things cheaply, fast, and in volume, with the expectation that they will be destroyed and replaced.
Japan's Defense Agency Compresses Years-Long Procurement Into Three Months
Japan's Acquisition, Technology and Logistics Agency moved to address the pace problem in June, launching what it called the Early Drone Interceptor Acquisition Program, targeting threats including long-range kamikaze drones of the Shahed type. Thirty-eight companies submitted proposals; four were selected for live field verification: Air Mobility, proposing Portugal's Beyond Vision model; ANA Trading, offering Germany's Quantum Systems; Japan Terra Drone, presenting a domestic solution; and Japan Marine, proposing the US-designed DZYNE Technologies model. Testing was conducted by the Maritime Self-Defense Force, with completion expected between late July and early August.
If results meet requirements, mass-production contracts could be signed as early as late August, with delivery targeted for September. The entire acquisition cycle — from open call to potential mass-production decision — would compress into roughly three months. Traditional defense procurement in Japan moves in the opposite direction: specifications are locked down first, then the system moves through research, development, verification, and testing before any purchase is made, a process that routinely takes years and sometimes exceeds a decade. The new approach is closer to testing something workable in the field and buying it fast.
But the results have already exposed a structural issue. Of the four finalists, only Terra Drone is a Japanese company. Terra Drone CEO Toru Tokushige said plainly at a late-July defense industry event that this troubled him from a national security standpoint. Ukraine's production edge, he explained, rests on a feedback loop that only a domestic manufacturer can sustain: frontline troops identify a problem on a given day, the manufacturer modifies the equipment overnight, and the improved version is back at the front by the following morning. No trading company or foreign supplier can replicate that cycle.
Toshiba moved to address part of the gap in late July, announcing a technical partnership with Nagoya-based drone startup Prodrone to jointly develop a domestically produced drone interceptor. Toshiba contributes radar systems, air defense infrastructure, command and control experience, and quality management standards for defense equipment. Prodrone handles airframe design, mass production, autonomous flight, and flight control technology. Both companies have explicitly listed building a supply chain from domestically sourced components as a cooperation objective — a lesson drawn directly from Ukraine, where a weapon that scores 70 on performance and arrives next month has proven more useful than one that scores 100 but takes five years to deliver.
The most symbolically resonant development in Japan's defense-industrial shift may not involve a Japanese company at all. Reuters reported on June 25 that Anduril Industries, the US defense technology firm, is in talks with Nissan to acquire the automaker's Oppama factory in Kanagawa Prefecture for military drone production in Japan.
The Oppama plant opened in 1961, spans approximately 1.7 million square meters, and has produced around 18 million vehicles over its lifetime, including the first mass-produced Nissan Leaf electric vehicle in 2010. As Nissan restructures its global manufacturing capacity, Oppama was scheduled to cease vehicle production around 2028. Nissan has said it will offer approximately 2,400 Oppama workers alternative positions at other domestic facilities. Anduril's proposal reportedly envisions retraining a portion of those workers for defense manufacturing.
Two geographic details are worth noting. Oppama lies near Yokosuka, which hosts major Maritime Self-Defense Force installations and one of the US Navy's most strategically significant forward deployment bases in Japan. Yokosuka City is also Defense Minister Koizumi's own electoral district.
Neither party has announced a formal agreement. Nissan said the plant's ownership future remains undecided; Anduril declined to comment on market speculation. Yet the nature of the talks already makes concrete what Japanese policymakers have been discussing in the abstract: building a defense industrial base may require extending well beyond a cluster of traditional defense contractors — toward the capacity to pull auto, electronics, and precision machinery companies into a defense supply chain on relatively short notice.
Chinese Components Dominate 90% of Japan's Commercial Drone Market
Securing factory space solves one problem while a deeper one remains: components. A drone is simpler than a fighter jet, but it still requires batteries, small motors, cameras, sensors, flight control chips, and communication modules. In peacetime, these are available through global supply chains. In a conflict, they may not be.
According to Japan's Ministry of Economy, Trade and Industry, Chinese-made drones account for approximately 70% of the global market. Within Japan's own commercial and industrial drone market, that share rises to roughly 90%. Supply chains for batteries, motors, and electronic components are similarly concentrated in China.
This concentration is precisely why the United States has been pushing Indo-Pacific allies to restructure their defense supply chains. The US-led Indo-Pacific Industrial Resilience Partnership (PIPIR) has opened discussions on common standards for small military drones and cross-border supply arrangements for batteries and small motors, including the possibility of cross-national joint production. Ukrainian drone manufacturers are already approaching suppliers in Japan and Taiwan — seeking cameras and microelectronic components — to reduce dependency on Chinese supply chains.
For Japan, the operational question is direct: if maritime shipping is disrupted or China restricts exports of key components, can Japanese drone production lines keep running? Assembling a drone in Japan from Chinese-sourced parts does not constitute a resilient supply chain. The Toshiba-Prodrone partnership's explicit commitment to domestic components, and the Defense Acquisition Agency's requirement for domestically sourced airframes in certain categories of the interceptor program, are both responses to the same concern.
New AI-Guided Drones Are Rendering GPS Jamming Insufficient
Electronic countermeasures add another layer of complexity. The standard counter-drone approach — jamming GPS signals or remote control links to disorient the aircraft — is becoming less reliable against newer systems. Next-generation drones are incorporating AI-based image recognition, autonomous navigation, and built-in resistance to GPS denial. Electronic warfare and counter-electronic warfare are both evolving rapidly.
Terra Drone has noted that battlefield drone technology now turns over on a cycle of months, with speed, range, communication methods, and jamming resistance all being updated continuously. Koizumi, speaking in March, called specifically for research into the simultaneous jamming of large numbers of drones, and for guidance technology capable of directing missiles and drones with precision even when GPS is unavailable.
The cost calculus cuts in a troubling direction. If an adversary deploys a swarm of low-cost drones and the defender responds with costly air defense missiles, the defender wins every interception while losing economically. That arithmetic is why Japan and several other countries are examining whether drones can be used to intercept drones — replacing an expensive missile kill with a far cheaper one.
Japan's Next Arms Race Begins on the Factory Floor
Japan's defense policy debate has shifted from the question of which weapons to buy to a harder one: whether the country's industrial system can sustain a prolonged conflict at all. After the first batch of drones is consumed in combat, can the second batch be ready immediately? After the second, where does the third come from?
Japan's government has begun treating defense spending not simply as a procurement budget but as an instrument of industrial policy — linking drone development to economic security frameworks, startup cultivation, and broader investments in AI and semiconductors. Drones, batteries, sensors, and the software to run them are inherently dual-use technologies. A serious push toward large-scale unmanned systems would inevitably draw in Japan's automotive, electronics, precision machinery, and software sectors.
Ukraine's war has reinstated a principle that modern military thinking had deprioritized: industrial staying power matters as much as weapons performance. A country that can keep producing, adapting, and fielding equipment faster than it loses it holds an advantage that no single high-performance system can offset. For Japan, the next arms race may not wait for a battlefield to begin. It may already be unfolding on the production line. （Related： Japans White Paper: China Now Outguns Taiwan on Every Front ｜ Latest ）
