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Moving a factory changes where one step happens. It does not automatically change who controls the materials, processing capacity, machines, skills or shipping routes that the factory depends on. A tech supply chain can gain final-assembly capacity in a new country and remain just as exposed, because the fragile point is often one or two stages upstream. Reshoring can reduce some risks, but it moves fragility rather than removing it. The useful test is which step is concentrated and how quickly it could be replaced.
Does reshoring make supply chains safer?
Not reliably. The OECD’s 2025 Supply Chain Resilience Review found that import concentration has risen: the number of products sourced from a limited range of suppliers was 50% higher in the early 2020s than in the late 1990s. Reshoring is often presented as the answer to that trend, which is why the OECD’s modelling matters. Its modelling of relocalisation found that such policies could reduce global trade by more than 18% and global real GDP by more than 5%, without consistently improving resilience. In more than half of the economies analyzed, GDP stability would decrease. These are modelled effects, not observed outcomes, and they are not forecasts for any specific policy or country.
The OECD’s position is not a retreat from trade. Its Secretary-General, Mathias Cormann, put the goal this way:
“For trade to continue to provide the foundation of our shared prosperity, and to ensure trade delivers on our citizens expectations, we need to work together to enhance the reliability and resilience of our supply chains.”
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The review’s emphasis is on agile risk management and effective diversification rather than withdrawal from international trade.
Why a supply chain stays fragile after the factory moves
Relocation debates tend to blur three separate questions: where a plant sits, who owns it, and where its inputs come from. Each can stay concentrated after the others change.
A plant’s location is not the parent company’s location
A factory can be built in a new country while its parent company, its process licensing or its specialist equipment suppliers remain in one place. Concentration of ownership is a separate exposure from concentration of production. A supply-chain map that records only a plant’s address will understate it.
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A downstream plant is only as available as the materials and components feeding it. The IEA’s critical-minerals work shows the pattern: graphite, rare-earth processing technologies, specialized equipment and technical expertise can remain concentrated even when the finished product is made elsewhere. Moving the final factory does not move those upstream steps with it.
Capacity is not the same as capability
Building a plant does not supply the process know-how, specialized machines, energy, water, supporting suppliers and trained staff needed to run it. The IEA points to gaps in technology, specialized equipment and skilled workers in refining and processing. Replacing a supplier is slow for the same reason: qualification and ramp-up take time even after the building is finished.
Where concentration sits in batteries and solar
The IEA’s 2026 clean-energy assessment puts China’s share of supply-chain production capacity at around 85% for solar and around 80% for lithium-ion batteries. Concentration is sharper at some stages inside those chains:
| Segment | China’s share of production capacity (IEA, 2026 clean-energy assessment) |
|---|---|
| Solar supply chain | Around 85% |
| Lithium-ion battery supply chain | Around 80% |
| PV wafers | 95% |
| Anode materials | 97% |
The 97% anode-materials share is the sharpest single battery-side figure, and it connects to the graphite exposure discussed below.
The IEA’s Energy Technology Perspectives 2026 tests what happens if the largest exporter is removed. In that scenario, capacity outside China could in theory meet most non-Chinese demand at final manufacturing stages for several of the technologies reviewed, using 2024 figures. Upstream and intermediate steps are thinner: at least one step in each chain covers less than one-quarter of demand.
Three limits apply to these numbers. “Theoretically” means the capacity exists on paper, not that it could be redirected quickly. The manufacturing-stage measure excludes resource extraction, so mining concentration does not appear in it. And the shares describe production capacity, not the output actually produced in a given year.
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Critical minerals and export controls
The IEA’s Global Critical Minerals Outlook 2026 reports that critical-mineral prices rebounded in 2025 and early 2026 as supply tightened. In that rebound, strategic minor-mineral prices more than doubled and tungsten prices rose sixfold. The IEA describes export controls and concentrated processing as immediate economic-security risks.
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The IEA estimates that a full disruption of battery-grade graphite trade could put more than USD 300 billion per year of downstream production outside China at risk. This is a scenario figure that assumes complete disruption. It is not a forecast of loss.
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Rare earths and the suspended controls
The IEA estimates that full implementation of the expanded rare-earth export controls announced in October 2025 could put USD 6.5 trillion per year of downstream production outside China at risk. This figure is also conditional on full implementation, not a measured loss. The same report says the expanded measures are suspended for one year, until November 2026. That expiry is only weeks away from the date of this article, so confirm the current position with an up-to-date official source before using either scenario in planning.
Semiconductors: what the U.S. review says
The U.S. Department of Commerce’s review covering 2021 to 2024 found that CHIPS Act initiatives redirected investment, but some manufacturing capacity remained regionally concentrated or was becoming more concentrated. The review names mature-node semiconductors and conventional packaging as diversification priorities. It also flags continuing risks from critical inputs, workforce needs, natural hazards and emerging technologies. Private-sector investment commitments for new U.S. semiconductor production exceeded USD 446 billion over the period it covers.
Commitments are not operating capacity. Announced investment does not mean every stage has been diversified. The review’s priorities identify where work remains, but they are not a complete map of single points of failure. Its headline findings do not assign a supplier-concentration share to each semiconductor stage, so anyone who needs that level of detail should look for stage-level data before drawing conclusions.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.How to compare relocation with the alternatives
Relocation, friend-shoring, domestic capacity and multi-region sourcing can all be judged on the same seven axes. Domestic capacity is not immune to disruption. A plant at home still imports some inputs and can still be hit by a natural hazard, a cyber incident or a domestic production shock.
| Axis | Question to answer | Evidence to look for |
|---|---|---|
| Stage covered | Which steps (mining, refining, equipment, components, packaging, assembly, logistics) are concentrated? | A tier-by-tier map from raw material to assembly, including logistics |
| Concentration | How much volume sits with one supplier, facility, country or owner? | Separate records for plant location, parent company and input origin |
| Substitutability | Could a qualified alternative meet demand, and how long would it take? | Qualification timelines and ramp-up records, not only construction plans |
| Capability depth | Are equipment, process know-how, skilled labor, energy, water and supporting suppliers in place? | Named equipment sources and staffing plans for each site |
| Shock exposure | Which export restrictions, transport chokepoints, natural hazards, cyber risks or domestic production shocks apply? | Scenario checks for each site and route |
| Cost and spillovers | What do resilience gains cost in trade, productivity and prices? | Costed alternatives weighed against the resilience gained |
| Visibility | Can dependencies be seen without exposing commercially sensitive data? | Provenance and event records (see the traceability section) |
What traceability can and cannot do
NIST IR 8536, finalized on 9 September 2026, proposes a manufacturing traceability meta-framework and includes an open-source Python reference implementation. It links supply-chain event data into a temporally ordered provenance chain, uses cryptographically verifiable links and supports selective disclosure, so parties can share verifiable records while withholding proprietary detail.
Quick Recap
What it gives you
- A structured view of which suppliers, facilities and routes sit behind a product, built from ordered event records.
- Verifiable records that can be checked without handing over every commercial detail.
- A better-organized input for risk management, showing where a dependency needs attention.
What it does not give you
- Spare capacity. A traceable chain can reveal a dependency but cannot create a second source.
- Qualified replacements. Supplier qualification and ramp-up still take time.
- Emergency planning. Inventory, contingency routing and supplier agreements remain separate work.
- Concentration reduction on its own. Seeing a dependency is not the same as reducing it.
- Proof of resilience. The framework is not evidence that a supply chain is resilient, or that any particular company uses it.
A practical order of work
- Map the bill of materials down to raw materials. For each tier, record the facility location, the parent company and the origin of the input.
- Flag every tier where one supplier, facility, country or owner accounts for most of the volume. Prioritize the tiers where substitution would be slowest.
- For each flagged tier, establish how long a qualified alternative would take to qualify and ramp up, using supplier records and past qualification timelines where they exist.
- Test the flagged tiers against export restrictions, transport routes and natural hazards, and note cyber exposure at key suppliers.
- Choose a response for each tier: a second qualified supplier, inventory, a design change or better provenance records. Only then decide whether moving final assembly closes a gap or simply relocates it.
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