Shinkong Synthetic Fibers, a long-established Taiwanese textile maker, is moving into the drone supply chain, and its shares climbed in morning trading — good news for shareholders, though the gain was trimmed by selling from investors finally back at break-even.

• Shinkong Synthetic Fibers has signed a three-way memorandum of understanding with Chi Hsien Technology and Swiss firm JEDSY, marking its entry into the drone industry.
• The share price surged more than 5% at one point in morning trading, but the gain narrowed to under 4% as previously trapped holders sold into the rally.
• The company's Shin Kong Young Lion Park aims to attract both Taiwanese and international firms as tenants, building up northern Taiwan's drone cluster.
• JEDSY wants to reduce its reliance on the Chinese supply chain and comply with the requirements of the U.S. National Defense Authorization Act, and plans to shift more components — and even production — to Taiwan.
• Drones require a wide variety of components, offering a new outlet for Shinkong Synthetic Fibers' existing materials business.

Outlook: Geopolitically driven demand for "de-Chinaization" of supply chains looks set to remain the main theme for Taiwan's drone-related stocks in the near term.