Drone Orders Outrun Electronics Supply at Codan and UMAC

Between 6 and 20 August 2026, Unusual Machines (UMAC), Codan (CODAF), Mobilicom (MOB) and Twin Disc (TWIN) each told investors on their earnings calls that drone-related orders are now outrunning electronics supply upstream, and that they are delivering by pre-buying long-lead parts and swapping vendors mid-quarter [1][2][3][4].

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Parts are ordered further ahead than drone orders can be seen

What sets how many drones a company can build in a quarter is usually the electronics inside the airframe — the datalink radio that carries commands and video between the operator and the aircraft, the flight controller and the sensors. These parts are not held in stock and have to be ordered upstream, typically six to eighteen months ahead. Codan is an Australian communications equipment maker whose DTC business supplies datalinks for small military drones, and its CEO said on 19 August that the company's current capacity rests on demand assumptions made "6, 12, 18 months ago" [1].

Codan also said order visibility on the unmanned side runs to four to six months at most. Radio makers sell to airframe manufacturers whose own forecasts keep moving, so suppliers are in effect "backing into other people's forecasts" [1]. With lead times more than twice as long as visibility, how much a company ships depends on which parts it already holds rather than on how many orders it has won. That gap does not belong to one company: any manufacturer assembling drone-related products from bought-in electronics runs into it.

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What four companies disclosed about orders and their responses

Codan told its full-year results call on 19 August that demand from unmanned systems is at "unprecedented" levels and set an FY2027 revenue growth target of around 20% on that basis, conditioned on supply chain constraints arising from the order momentum [1]. Management stressed that this is a "global" electronics supply environment and "not really specific to Codan," and that it has seen no actual impact so far [1].

Vendor swaps and pre-buys have already happened at two other companies. Unusual Machines supplies non-Chinese components for small drones, and its CEO said on 6 August that the company "outgrew one of our electronics vendors" during the second quarter, replaced components while hunting for parts and still delivered on time, adding that the episode is "not going to show up in the financial statements" [2]. Mobilicom, which makes comparable datalinks, said on 13 August that it had accelerated procurement of long-lead items for an additional 1,000 units in response to world supply chain constraints, with that stock earmarked for its first US production run in 2026 [3].

Twin Disc put a number on the size of the defense demand. The company makes marine and vehicle driveline components and said on 20 August that defense made up 17% of total backlog at year end, a 56% increase year over year, with a further $30m to $50m of defense projects in its pipeline; FY2026 revenue was $381.3m [4]. Taken together: orders are rising, the response is stocking up and changing suppliers, prices have not moved, and no company says current results have been affected.

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A tariff puts a price on the fastest workaround

A US presidential proclamation dated 13 August applies Section 232 duties to unmanned aircraft and their components. The platform duties start on 3 September, at 100% for aircraft with a maximum take-off weight above 25 kilograms and 25% at or below that weight, while the 25% duty on components is deferred 180 days to 9 February 2027 [5]. Allied countries can qualify for a 15% cap, 10% for the UK, but that treatment is conditional on certifying that "substantially all the critical components and technology" are of US or allied origin [5].

Because the condition rests on component origin, the rule connects directly to the shortage. The fastest fix when a part runs short is to switch to whatever is available, and switching can cost a supplier its tariff treatment, turning a shortage into a compliance problem. Codan's answer is to move production: the CEO said it will begin localizing the relevant product in the US over the next 12 months [1], and standing up a US line means requalifying the very parts that are already short.

None of this has reached any company's current results yet. Codan says there has been no actual impact and Unusual Machines says it will not enter the statements, while Red Cat's 6 August call named no shortage at all, describing added floor space and "strengthening supply chain resiliency" instead [6]. The tightness sits at the electronics layer rather than uniformly across the chain. What can be checked next is order-to-revenue conversion and delivery in the December 2026 quarter; pre-buys, expedite fees and the component duty only enter cost of goods in the March 2027 quarter.

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Which companies this change could affect

• Plexus (PLXS): A contract manufacturer that builds electronic assemblies for other companies. Management said on 30 July that FY2026 aerospace and defense revenue would grow more than 20%, "led by our defense and unmanned subsectors," booked $135m of sector wins in the quarter, and named Oradea, Romania as its center of defense excellence in continental Europe [7]. It sells qualified capacity and process engineering, the layer a design owner turns to when it is short of parts or floor space.
• Amprius Technologies (AMPX): Makes silicon-anode cells used in drones and disclosed on 5 August a $24m order from a European drone manufacturer, with its US pilot line in Fremont starting production in December 2026 [8]. Cells are a long-lead item whose origin has to be certified, which places the company where the shortage and the tariff intersect.
• Ultralife (ULBI): Makes primary lithium batteries and battery packs. Management said on 7 August that the acquired cell business expects more than 30% growth in customer demand and cell consumption over the next year, and tied incremental revenue from the fourth quarter to demand from water-based unmanned platforms [9]. Its cells and packs are made in the US, putting it on the more favorable side of the February 2027 component duty.

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Sources

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

"I guess when you look at businesses like Minelab and DTC, we're fundamentally making assumptions on forecasts 6, 12, 18 months ago. So the demand we've seen has really outpaced our original forecasts, which have been continually updated. So the outperformance in demand, really when we're looking forward probably into H2, we're sort of seeing that we need just to continue to upgrade our forecasts. And that's always a lag in time. So we haven't seen any impact at the moment. All we're saying is from a constrained supply -- electronic supply chain environment globally, not really specific to Codan. We're just monitoring those forward forecasts and ensuring that we've got the right supply components."

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

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

[4] Drillr · Twin Disc (TWIN) · 2026-08-20 · earnings call

[5] US Presidential Proclamation · Adjusting Imports of Unmanned Aircraft Systems and Unmanned Aircraft Systems Components into the United States · 2026-08-13 · Section 232 proclamation

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

[7] Drillr · Plexus Corp. (PLXS) · 2026-07-30 · earnings call

[8] Drillr · Amprius Technologies (AMPX) · 2026-08-05 · earnings call

[9] Drillr · Ultralife (ULBI) · 2026-08-07 · earnings call

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