Codan (CODAF), Unusual Machines (UMAC): Drone Demand Outruns Electronics Supply

Between 6 and 20 August 2026, Codan (CODAF), Unusual Machines (UMAC) and Mobilicom (MOB) each told earnings calls that drone orders are growing faster than the electronic components supplied to them, and that they are pre-buying stock or switching vendors in response [1][2][3].

Output is set by component orders placed long before

The drone chain has several tiers. Airframe makers sit on top. Below them are modules such as datalinks and flight control computers — a datalink carries commands and video between the ground station and the aircraft, and is one of the most expensive and least substitutable electronic items on board. Below that sit the chip, RF component and connector makers and the contract manufacturers.

Module makers have to order components far in advance. Codan is an Australian communications equipment maker whose DTC unit builds datalinks for small drones, and management said these components are ordered against forecasts made "6, 12, 18 months ago" [1]. The trouble is at the other end: the drone market has "at a maximum ... a 4- to 6-month visibility market. You're really backing into other people's forecasts" [1]. Demand keeps running past the original forecast, the component orders already placed cannot keep up, and lead time rather than the order book sets output. The whole chain draws on the same chips and RF parts, and Codan described the situation as a "constrained supply -- electronic supply chain environment globally, not really specific to Codan" [1].

A 20% revenue target with a supply condition attached

At its full-year results on 19 August, Codan set an FY2027 revenue growth target of "in the order of 20%" and stated in the same sentence that the target is subject to supply chain constraints created by ongoing order momentum [1]. The company's long-published growth range is 10% to 15% a year, so 20% sits above it, and management called unmanned demand "unprecedented." The same call gave the boundary: Codan has "not seen any impact at the moment" and is monitoring forward forecasts to make sure it has the right components [1].

Unusual Machines makes US-built drone components. On 6 August it said that during the quarter it "outgrew one of our electronics vendors" and had to swap in different components to keep customer deliveries on schedule, and that this would not show up in the financial statements [2]. It also sized the demand: the US market remains supply constrained "both this year and deep into 2027," and more than 60,000 drones are expected to be ordered in the second half of 2026, mostly in the fourth quarter [2]. Mobilicom, an Israeli maker of drone datalinks and protection modules, said on 13 August that it had accelerated long lead item procurement for an additional 1,000 units, stock intended to support its first US production run in 2026 [3].

Tariffs turn a shortage into a country-of-origin problem

A Section 232 proclamation issued on 13 August puts a 100% duty on imported drones with a maximum take-off weight above 25 kilograms and 25% on those at or below it, with a 25% duty on certain drone components taking effect on 9 February 2027. The allied rate is capped at 15%, and 10% for the United Kingdom, but only if substantially all the critical components and technology are certified as US or allied in origin [4]. Swapping in whatever part is available during a shortage can therefore cost a product its tariff treatment, which makes a sourcing decision a compliance decision at the same time.

Codan's answer is to move the line. Management said the duty on its product entering the US is currently around 10%, and that it will start localizing that product in the US over the next 12 months [1]. Localizing means requalifying the same components that are already tight, which absorbs more capacity in the near term. The things to watch are how fast the order book converts to revenue and how even deliveries are. The boundary sits in the same material: Codan says the impact has not arrived, Unusual Machines says its own episode stays out of the accounts, and Red Cat (RCAT) named no supply constraint at all on its 6 August call, describing instead an additional 12,000 square feet of manufacturing and engineering space in San Diego and work on "strengthening supply chain resiliency" [5].

Companies this change may affect:

• Plexus (PLXS): A large electronics contract manufacturer whose product is turning other people's designs into qualified production lines, which is the tier drone orders ultimately have to land on.
• Amprius Technologies (AMPX): It makes high energy density cells for drones, sitting in the same module tier as datalinks, so its delivery pace is governed by the same long lead time materials.
• Nortech Systems (NSYS): A small wire harness and electronic assembly manufacturer whose customers include aerospace and defense OEMs, where component allocation and longer lead times press directly on what it can deliver.

Sources

[1] Drillr · Codan Limited (CODAF) · 2026-08-19 · earnings call

"As a result of unprecedented levels of demand we are experiencing primarily in unmanned systems, we expect the first half of FY '27 to significantly exceed the first half of FY '26. Given the strong start to the year, subject to related supply chain constraints resulting from ongoing order momentum, we are currently targeting full year FY '27 revenue growth in the order of 20%."

[2] Drillr · Unusual Machines (UMAC) · 2026-08-06 · earnings call

[3] Drillr · Mobilicom (MOB) · 2026-08-13 · earnings call

[4] The White House · Adjusting Imports of Unmanned Aircraft Systems and Unmanned Aircraft Systems Components into the United States · 2026-08-13 · presidential proclamation · https://www.whitehouse.gov/presidential-actions/2026/08/adjusting-imports-of-unmanned-aircraft-systems-and-unmanned-aircraft-systems-components-into-the-united-states/

[5] Drillr · Red Cat Holdings (RCAT) · 2026-08-06 · earnings call

This is only here to help you spot industry changes and companies you may have missed - it is not a stock recommendation.