[News in Business] The World's Largest Drone Manufacturer DJI Unfazed by US Sanctions

Sanctions by the US Since December 2021
Global Drone Market Share Exceeds 70%

[Asia Economy Reporter Hyunwoo Lee] China’s DJI (Dajiang Innovation), which holds more than 70% of the global drone market share, is expected to continue its growth momentum as it expands its market despite U.S. sanctions. Amid various allegations, including suspicions of drone supplies to the Russian military, DJI has denied all accusations and is reportedly continuing lobbying efforts in the U.S. political sphere.

According to CNBC on the 8th (local time), DJI, the world’s largest drone manufacturer, has surpassed a 70% market share in the drone industry. According to drone market analysis firm Drone Industry Insights, the drone market size is expected to grow from $30.6 billion (approximately 38 trillion KRW) in 2022 to $55.8 billion by 2030, and accordingly, DJI’s revenue is also anticipated to continue growing.

[Image source=DJI website]

Headquartered in Shenzhen, China, DJI was founded in 2006 by Frank Wang. Since launching its first mass-produced drone, the 'Phantom 1,' in 2013, the company has shown rapid growth. Currently, DJI has 14,000 employees, with research and development staff accounting for 25% of the total, making it a massive enterprise.

The only known obstacle to DJI’s unstoppable growth is U.S. sanctions. In December 2021, U.S. authorities blacklisted DJI on allegations that its drones were used for surveillance and human rights abuses against residents in the Xinjiang Uyghur Autonomous Region of China. To this day, U.S. investors are prohibited from investing in DJI. DJI has denied any connection between its company and surveillance of Xinjiang residents, but the U.S. has not lifted the sanctions.

After the outbreak of the war in Ukraine last year, DJI was also embroiled in suspicions of supplying drones to the Russian military. Following the conflict’s onset, the Ukrainian government strongly criticized that drones used by Russian forces on the battlefield were developed by DJI, raising serious allegations. However, DJI has refuted these claims, stating that its drones are civilian models and do not meet military specifications.

DJI has intensified lobbying efforts with U.S. authorities, emphasizing that its drones do not pose a threat to U.S. national security. However, CNBC reported that suspicions persist that the firmware software installed on DJI drones is traded on the black market and is being used to leak information from other countries without authorization, which has made it difficult for the U.S. to lift sanctions.

Paolo Stagno, a cybersecurity expert, told CNBC in an interview, “Modified versions of DJI’s drone firmware are being traded on the black market,” and pointed out, “Most pilots who want to remove flight height and distance restrictions can download such firmware.”