US Bans DJI Drones, But China Controls Key Materials
The US has banned new DJI drones as of December 2025, removing a company that holds 80% of the American market, but it faces a supply chain crisis in replacing them. China controls 90% of rare earth processing, 99% of drone battery cell production, and 90% of permanent magnets powering drone motors.
Skydio's Expansion
Skydio, the largest American drone manufacturer, announced plans to invest $3.5 billion over five years to:
- Expand US drone production.
- Open a factory five times larger than its current facility.
- Create more than 2,000 direct jobs and 3,000 supplier jobs.
- Build a domestic component supply chain through 'SkyForge'.
This investment is the largest response yet to the ban, but building a supply chain to match DJI's scale will take years.
The Ban and Its Impact
The 2025 National Defence Authorisation Act required a US national security agency to review DJI by 23 December 2025. No review was completed on time, leading to DJI's addition to the FCC's Covered List, blocking new product imports and sales.
DJI has sued the FCC, claiming approximately $1.5 billion in lost revenue from 25 planned US products in 2026. The ban follows a similar logic as the US-China semiconductor decoupling, restricting Chinese tech access and accepting economic consequences. However, while the US has companies like ASML and Applied Materials to fabricate semiconductors, China relies on buying components from America.
DJI Drones' Advantages
DJI drones are not only cheaper but also outperform their American equivalents across most market levels. For instance, a DJI Mini 4 Pro retails for around $760.