11 August 2026
Executive Summary
The United States is discovering that attracting billions of dollars of new manufacturing investment does not automatically create the domestic supplier network needed to support it.
US officials say they are working with foreign investors to identify missing components and help smaller American manufacturers expand.
The issue has become particularly visible at Philadelphia’s Hanwha-owned shipyard.
Hanwha plans approximately $5 billion of investment at the facility and expects employment potentially to rise from around 2,000 to 10,000. Each large vessel depends upon more than 1,000 suppliers, however, meaning the shipyard’s expansion depends upon a much wider industrial network scaling alongside it.
US Treasury has consequently introduced a Strategic Vendor Program designed to help foreign investors identify suitable domestic suppliers following foreign-investment review. The US Small Business Administration is also committing funding specifically aimed at scaling critical domestic suppliers.
UK Impact
UK businesses investing in or supplying large overseas industrial projects should recognise a frequently overlooked risk:
The factory may be funded before the supply chain is ready.
Problems can arise through shortages of:
- Specialist components.
- Qualified welders and engineers.
- Testing facilities.
- Tooling.
- Certified materials.
- Maintenance providers.
- Logistics capacity.
- Approved subcontractors.
UK companies participating in US infrastructure, defence, energy or advanced manufacturing projects may therefore experience delays even where the principal customer has ample financing.
Global Impact
Governments around the world are encouraging domestic manufacturing through:
- Tariffs.
- Subsidies.
- Local-content requirements.
- Tax incentives.
- Procurement preferences.
- Strategic investment programmes.
But industrial capacity cannot be recreated simply through capital expenditure.
A new £1 billion factory may require hundreds of suppliers that themselves need:
- New equipment.
- Additional employees.
- Finance.
- Regulatory approvals.
- Certification.
- More warehouse space.
That creates a risk of supply-chain inflation during rapid industrial expansion.
Too many projects may compete simultaneously for the same specialist suppliers.
Our View
Large projects should assess supplier capacity before financial close, not after construction begins.
Businesses should:
- Identify critical suppliers during project design.
- Ask suppliers how much spare production capacity actually exists.
- Confirm whether they are committed to competing projects.
- Map specialist labour requirements.
- Establish which components have only one qualified manufacturer.
- Agree capacity reservations where appropriate.
- Include realistic escalation provisions within budgets.
- Avoid basing procurement assumptions solely upon historical lead times.
- Qualify alternative suppliers before production starts.
- Monitor supplier balance sheets where rapid expansion requires significant borrowing.
A project can be fully financed, fully permitted and technically sound—and still fail to start on time because somebody cannot manufacture a relatively inexpensive component.
Capital builds the factory. Supplier capacity determines whether it operates.
Risk Indicator: ELEVATED
Disclaimer
The information contained within these Market Alerts is provided for general market awareness and informational purposes only. It does not constitute financial, legal, investment, regulatory or insurance advice. Whilst every effort has been made to ensure accuracy at the time of publication using multiple reputable and independently verified sources, geopolitical events, legislation, regulation and market conditions may change rapidly. Readers should obtain appropriate professional advice before acting upon any information contained herein.
Invictus Risk Solutions LLP – Helping organisations stay ahead of emerging risks through informed insight and independent analysis.