Can Domestic Drone Production Transform Japan's Defense?

Terra Drone, headed by President Toru Tokushige, was selected from proposals submitted by 38 companies for the Acquisition, Technology & Logistics Agency's interceptor drone program and has moved toward the mass-production stage.

The company's effort reflects a broader shift in warfare demonstrated in Ukraine, where inexpensive drones are being produced and modified at extraordinary speed and are increasingly being used to intercept attack drones that would otherwise require far more expensive surface-to-air missiles.

Tokushige has repeatedly traveled to Ukraine and returned to Japan shortly before discussing the company's plans on August 28. He said Russia is now sending roughly 8,000 drones into Ukraine each month, up from around 5,000 when he began making regular visits in September last year.

Air raid alerts are a routine part of life, often occurring several times during the night, Tokushige said, adding that his repeated movement between peacetime Japan and wartime Ukraine has reinforced his sense that Japan must prepare before a crisis occurs.

Terra Drone has acquired two Ukrainian drone companies, Amazing Drones and WinnyLab, and is using their battlefield experience to develop interceptor systems.

Amazing Drones, with about 20 employees, produces the Terra A1 interceptor drone, while WinnyLab, with about 15 employees, produces the Terra A2. Both systems have been used and refined under combat conditions in Ukraine.

Production bears little resemblance to a conventional defense factory. Some drones are assembled in apartments, offices, warehouses and other small facilities whose locations are deliberately dispersed to reduce the risk of a Russian strike destroying production capacity in a single attack.

Tokushige said he has spoken with more than 100 Ukrainian drone companies and visited about 20 production sites, but has rarely seen anything resembling a traditional large-scale factory.

At one facility, about 15 workers can produce roughly 1,000 small drones a month, equivalent to about 12,000 a year.

Ukraine's overall drone production capacity has expanded dramatically. Before the war, capacity stood at roughly 5,000 units, while production capability is expected to reach around 7 million units this year.

Ukraine's Defense Ministry has also approved 413 drone models and derivatives for military use this year through July, illustrating the speed at which designs are entering the battlefield.

The production philosophy emphasizes speed, cost and adaptability rather than perfection. When engineers discover a weakness in combat, software or hardware can be modified immediately rather than waiting through a lengthy conventional development cycle.

Ukraine increasingly uses autonomous systems because manually controlled FPV drones are vulnerable to Russian electronic warfare. Signals can be lost as a drone approaches its target, rendering remote control ineffective.

Fiber-optic drones can avoid some electronic interference but are generally limited to ranges of around 40 to 50 kilometers. As a result, Ukraine is increasingly combining human remote operation with autonomous systems that can take over when communications are lost and continue toward a target.

Terra Drone's Japanese-developed interceptor follows that approach. Unlike the Ukrainian model demonstrated by Tokushige, which is manually piloted, the Japanese version is designed to operate autonomously through cameras, sensors and software linked to radar.

The drone weighs about 4 kilograms when fully equipped and uses components that can be manufactured with 3D printers.

Tokushige said 3D printing is essential because drone designs change so rapidly that conventional molds could become obsolete within three or four months. A digital design can instead be altered and immediately put back into production.

Cost is another central consideration.

Interceptor drones in Ukraine can cost around $3,000 to $4,000 each, equivalent to roughly 400,000 to 500,000 yen, while a Shahed-type attack drone was described as costing around 5 million yen. Conventional interceptor missiles can cost around 100 million yen or more.

Tokushige said interceptor drones were little more than a concept when he first visited Ukraine in late September last year, with successful interceptions beginning around October or November.

Ukraine is now using interceptor drones on a large scale against incoming attack drones.

The rapid evolution has continued as Russia responds with faster aircraft. Standard Shahed-type drones fly at around 200 kilometers per hour, while interceptor drones can reach roughly 300 kilometers per hour. Russia has subsequently introduced jet-powered drones capable of around 400 to 500 kilometers per hour, prompting Ukraine to work on faster jet-powered interceptors of its own.

Ukrainian developers are also experimenting with extremely low-cost missiles. Tokushige said prototypes under development could cost around $10,000 to $20,000, or roughly 3 million yen, depending on their intended target, far below the price of conventional missiles.

The principle, he said, is to avoid expensive overengineering and instead use commercial electronic components where possible to build weapons that are inexpensive, sufficiently effective and capable of being produced in large numbers.

Japan's latest procurement marks a sharp change in pace.

Tokushige said the interceptor selection process was completed in roughly three months, compared with the year to year and a half that such procurement decisions could traditionally require.

He said the accelerated process represented a strong signal that Japan's defense establishment recognizes the need to change.

The next challenge, however, is mass production.

Tokushige wants Japan to establish at least one complete production line capable of serving as a "mother factory," with standardized manufacturing procedures, worker training, testing and quality control.

Once a functioning line exists, he said, additional lines could be duplicated relatively quickly. In a national emergency, a production capacity of 300,000 drones could potentially be expanded to 3 million if the supply chain and manufacturing system were already established.

The problem is that Japan remains heavily dependent on foreign components.

China dominates the global commercial drone industry, with DJI alone accounting for around 70% of the market and Chinese manufacturers collectively representing roughly 90%, according to figures cited during the discussion.

Defense procurement makes reliance on Chinese parts difficult, leaving companies to source components from Japan and other countries.

Japanese components can cost four or five times as much as Chinese equivalents, while Taiwanese parts typically cost around 2.5 to three times as much. As a result, Taiwanese components are widely used because they provide a compromise between price, quality and security requirements.

Tokushige said Terra Drone itself uses a significant number of Taiwanese components.

He warned, however, that dependence on Taiwan poses its own strategic risk. If a Taiwan contingency disrupted shipping, Japan could suddenly lose access to essential drone parts precisely when it needed to increase production.

For Tokushige, domestic production therefore represents not merely an industrial policy objective but a requirement for maintaining Japan's ability to continue fighting during a prolonged emergency.

Localization is also important because drones must be adapted to their operating environment. Japan's maritime geography, for example, could require stronger resistance to salt, wind and other conditions.

Manufacturers also need close cooperation with parts suppliers as designs change, requesting chips with greater heat resistance, motors capable of higher acceleration or systems that extend flight range. Tokushige argued that such rapid collaboration becomes difficult when suppliers are overseas.

One Japanese company demonstrating the country's potential is ASTER, a manufacturer in Yokote, Akita Prefecture, with around 150 employees.

The company produces high-performance electric motors whose coils use flat aluminum rather than conventional wound copper. The structure produces less heat, allowing tighter sealing and improving resistance to water and dust.

ASTER began marketing its technology for drone motors in 2020 but initially struggled to secure business with Japanese manufacturers.

President Takenobu Hongo said U.S. companies were more willing to explain openly what they wanted to build, how the technology would be used and what performance they required. Japanese companies, by contrast, often provided less detail, leading to repeated design revisions, higher costs and failed negotiations.

U.S. defense technology company Anduril took an interest in ASTER's technology in December 2023. After company representatives traveled to Akita and began working directly with ASTER, its motor was adopted for a surveillance drone within about six months.

ASTER has since received increasing inquiries from overseas, and around 90% of its business now comes from foreign companies, compared with about 10% from Japan.

Hongo said he would refuse to supply technology for certain offensive weapons but would consider supplying motors for interceptor drones designed to defend Japan.

He said the war in Ukraine had changed his thinking about defense, arguing that possessing strong defensive technology had become necessary if a country wanted to protect itself.

Terra Drone is also preparing to develop domestically produced batteries in cooperation with Japanese small and midsize manufacturers.

Tokushige cited one former electronics supplier that once produced around 500,000 battery packs and employed about 300 people but has since fallen to only five employees after production shifted overseas.

He argued that requiring major drone components to be produced domestically could revive Japanese manufacturers that still retain the necessary engineering knowledge.

The United States has already moved more aggressively in that direction, he said, with stronger requirements for domestic sourcing prompting the emergence of new battery manufacturers and rapid capacity expansion.

Tokushige called for Japan's Defense Ministry to make Japanese production of major components, including motors, batteries and controllers, an explicit requirement in procurement tenders.

At present, he said, domestic sourcing is not necessarily a minimum condition. Once technical specifications are met, price can become the determining factor, encouraging manufacturers to select less expensive foreign components to remain competitive.

Requiring Japanese parts would give drone manufacturers a reason to place large orders with domestic suppliers and provide those suppliers with the confidence needed to invest in capacity.

Security analyst Chiaki Akimoto said the broader lesson from Ukraine is that defense manufacturing culture itself is changing.

Traditional weapons programs often develop new military technologies first and later allow them to spread into civilian industries, a process known as "spin-off."

Ukraine has increasingly reversed that model by taking existing civilian technology, including ordinary computer and consumer electronics components, and adapting it rapidly for battlefield use in what Akimoto described as "spin-on" development.

The result is a system capable of producing large numbers of relatively inexpensive weapons in months rather than spending years developing smaller numbers of highly sophisticated systems.

Similar approaches are beginning to appear elsewhere. Britain has asked defense companies to produce new systems on highly compressed schedules, while newer defense technology companies in the United States are developing unmanned systems far faster than traditional procurement cycles.

Akimoto said the ability to build quickly and cheaply has become a central factor in modern military competition and warned that Japan remains behind in that area.

He said the issue is not necessarily that every component must be Japanese, but that critical defense systems should rely on technologies supplied by countries that can be trusted during a crisis.

Ukraine has also become a source of battlefield knowledge for its Western supporters.

Britain announced on August 24 that it would provide Ukraine with technology related to the Storm Shadow long-range cruise missile, while Ukraine plans to share roughly 5 million battlefield images and other operational data that could be used to train British artificial intelligence systems.

The battlefield management systems described in the discussion have accumulated years of information on Russian drone flights, military equipment and acoustic sensor readings, giving countries supporting Ukraine access to data that would otherwise take years of combat experience to obtain.

Western intelligence is also playing an increasingly important role in Ukrainian long-range strikes against Russian infrastructure.

Rather than simply attacking the largest visible facilities, intelligence agencies can identify critical components in oil refineries, logistics centers and other industrial infrastructure whose destruction could cause disproportionate disruption.

Such "industrial intelligence" can draw on plant designs, supply-chain information, satellite imagery, cyber operations and knowledge gathered from engineers familiar with Russian facilities.

The growing integration of drones, artificial intelligence, intelligence gathering and autonomous systems is accelerating a broader transformation of warfare.

Akimoto pointed to increasingly sophisticated unmanned ground vehicles, boats and humanoid robots as signs that military operations are moving toward systems in which fewer people are directly exposed to combat.

China is advancing particularly quickly in humanoid robotics, he said, and technology developed in the civilian sector could readily be transferred to military applications.

For Japan, the immediate issue is more basic: whether it can establish a resilient supply chain and production system before large numbers of inexpensive attack drones become a direct security threat.

Tokushige said Japan has begun to recognize the importance of interceptor drones and praised the unusually rapid procurement process, but said domestic components remain the final major obstacle.

If that can be resolved, he said, Japanese manufacturers would be able to expand production dramatically in an emergency.

"The remaining challenge is the domestic production of components," Tokushige said. "If we can solve that, then when an emergency comes, we will take care of the rest."

Source: TBS