The U.S. has done it to DJI again.
On June 17, the U.S. House of Representatives passed a bill on Friday to ban the future sales of Chinese DJI's drones in the United States, which means that DJI may be banned altogether. The Countering Chinese Drones Act is part of the U.S. National Defense Authorization Act of 2025 (FY25 NDAA), an important annual piece of legislation that will determine the allocation of defense spending for the year.
However, despite political pressure and frequent crackdown, DJI's market share among U.S. law enforcement agencies is still as high as 90%, and its market share in the emergency response field has reached 92%. The complete ban on the sale of DJI is a seven-wound punch from the United States, injuring 1,000 people and causing 800 self-losses.
From the perspective of losses, DJI's drone sales in 2020 will be 26 billion yuan, of which 32% will be "absorbed" by the US market, that is, 8.32 billion yuan. At that time, DJI's drone market share in the United States was 76.1%, and today, DJI's market share in North America has even reached 85%.
Therefore, the U.S. market accounts for more than one-third of DJI's global market, and if DJI is completely banned from sales, if DJI can't sell a drone in the U.S., then DJI's global sales will drop by one-third. This is undoubtedly a punch to DJI.
But the U.S. also has to bear the cost of losing DJI. At present, local police in various counties/cities in the United States are using DJI's drones for law enforcement, and some places have even set up special drone units. If you don't have DJI's drones, you need to buy police helicopters for many uses, but not all local police departments can afford helicopters, and a police version of the Airbus H125 costs $3 million, plus pilot salaries, maintenance fees, and fuel costs...... The price of a large 4-axis + variable-zoom white light/thermal imaging camera and a spare battery is less than $30,000.
What's more, DJI has a long-term market share of more than 90% in the fields of firefighting, police, disaster, emergency response, urban and land planning, and university scientific research in various states, counties, and cities in the United States.
For six years, from 2016 to 2022, the U.S. imposed restrictions and sanctions on DJI. For example, in 2017, the Pentagon banned the U.S. military from using DJI's drone products under the pretext of "data security risks" and began a year-long sanction against it.
However, due to the inability to find a substitute product, DJI's market share in the United States increased during the year. In 2020, the U.S. Department of Commerce announced that it would add 59 Chinese entities, including DJI, to the so-called "Entity List" for export controls, citing "violations of U.S. national security."
But the fact is that DJI has maintained a market share of more than 70% in the consumer drone market during this period, and the market share in North America even reached 85% at one point.
It shows that in the past many years, US sanctions have been sanctions, and they have been used or continued. DJI's irreplaceability remains.
Judging by the statement of the Association for Unmanned Systems International (AUVSI), which represents American drone manufacturers, he acknowledges that there is a technology gap, but believes that the reason is DJI's dominance of the US market and subsidies from the Chinese government.
Therefore, the United States wants to force itself and develop its own drone industry. After all, the importance of drones in the U.S. public service sector is self-evident, and the world's commercial drone market is rapidly expanding from $3.7 billion in 2018 to $103.7 billion, with China accounting for half of it. The United States would like to have its own "DJI" too much.
The United States needs DJI, and where is the irreplaceability of DJI?
Founded in 2006, after more than 10 years of development, DJI has accumulated more than 5,000 core patents in the field of drones, from a small company with only four people to tens of thousands of employees, and a large number of core technologies have achieved autonomy, from flight control systems, gimbal mechanisms, mechanical structures, flight safety assurance systems, fuselage structural parts, etc.
But despite this, many of DJI's components and chips in the past also relied on the global industrial chain to supply, such as storage devices and cameras from South Korea's Samsung, and memory from SK hynix. In addition, some core components are from the United States, including communications, power supplies, chips, etc., which have common interests with each other, and sell them in the United States, not only for DJI to make money for itself, but also for DJI, and for American component manufacturers.
Among the American components used by DJI, the core is the chip, including the main control chip, image signal processing chip, wireless communication chip, etc., however, DJI mainly uses relatively mature chip products with 28nm and above processes, and the requirements for the chip process are low. If the supply is cut off, DJI can completely achieve localization without relying on imports, in fact, in some chips, DJI has already achieved localization.
DJI's core competitiveness comes from its own flight control system, even if competitors use the same materials to assemble, but they just can't beat DJI, because the system is not an open source system, the underlying code is its own, and others cannot modify and learn its source code, which means that it maintains independence in flight control system technology. This kind of system is similar to Apple's iOS system, the system is combined with hardware, and the integration of software and hardware is the comprehensive competitiveness.
In order to compete with DJI's monopoly drone market, in the past few years, the United States has supported many technology companies to enter the civilian consumer drone market.
In 2022, the United States will include DJI in the chip export blacklist, but the 28nm required by DJI can't be stuck at all, and DJI's main CPU is the P1 independently developed by DJI, which is made domestic for graphics processors. The memory chip used to be Hynix and Samsung, and after the "stuck neck blacklist" in the United States last year, the memory chip was replaced by a domestic memory chip.
The United States is technically stuck, and the United States cannot be stuck. It can only be completely banned and removed from the market.
DJI should not be careless
DJI also has to have a sense of crisis. After all, the U.S. market is an important market for DJI drones, and the total ban on sales in the U.S. market has dealt a major blow to DJI's sales in the United States. At the same time, make room for the development of indigenous UAVs in the United States. In the past few years, the United States has been quietly cultivating its homegrown drone supply chain, from gimbal to fuselage to battery, from program to algorithm to integration.
In particular, the U.S. strategy of imposing a total ban on DJI's sales may to some extent already mean that some of its domestic markets can achieve its own local alternatives. In particular, the market share of the American drone company Skydio is increasing. The U.S. ban on DJI wants to force its own market potential, and in an environment without competitors, the huge market demand can also cultivate strong technology products.
At present, the American drone company skydio's AI and automation algorithm capabilities have been ahead of DJI, and obstacle avoidance capabilities have always been skydio's strengths ahead of DJI, but DJI has no rivals in flight control, image transmission, stability and image quality, which is the real hard indicator of the drone, and the cost control and cost performance have always exceeded the same type of drone companies in the United States.
Objectively, DJI has a benchmark company in the United States, but DJI is easier to use and cheaper, but the manufacturing and research and development of drones in the United States are continuing to advance, and the supply chain of chips and drones in the United States is also constantly improving.
From the perspective of future trends, can the United States gradually pull in the performance, cost and price of DJI in the field of consumer drones? The possibility exists.
Once the performance and cost are pulled in, then the United States' dependence on DJI will gradually decrease, first gradually complete local substitution, and then go to the global cannibalization of DJI's market, which is a crisis that DJI needs to face and face.
Unmanned aircraft has long become a strategic industry, and now it is a strategic product in short supply in the world, it is precisely because of DJI's extensive penetration rate in the United States public service agencies, the impact of this comprehensive ban is to hurt people, from the perspective of the United States' current dependence on DJI, DJI is needed in many industries, and its local drone companies have not yet developed in an all-round way, but in the long run, with the growth of its local companies, it may gradually eat away at DJI's market share in the United States.
Even if it leads to the increase in the cost of many of its industries and blocks the financial route of its parts manufacturers, it is necessary to sanction DJI, which is a heavy blow to DJI, and the United States is uncomfortable in a short period of time, and it will certainly not be able to be replaced quickly in the short term, and it must be used, this substitution process raises the cost of using drones in the United States, causing a lot of inconvenience, but in the long run, with the expansion of its local drone industry, the pressure on DJI will increase.
For DJI, it needs to think about countermeasures earlier and open up new battlefields, and at the same time, it needs to continuously improve its irreplaceability in terms of technology, cost, software and hardware functions, and supply chain, so as to continue to lead the United States in comprehensive indicators such as product strength and technological strength. Still being the first in the world and irreplaceable in the global market is the best response to the US embargo.
Author: Wang Xinxi TMT Senior Ping This article is not reproduced without permission