1. Executive Summary

The capability of the United States military to deter and defeat peer adversaries is fundamentally linked to the lethality, range, and reliability of its kinetic systems. Underpinning this operational capability is the defense energetics industrial base, a highly specialized sector responsible for the chemical formulations—explosives, propellants, and pyrotechnics—that provide munitions with their thrust and destructive power. For decades, the prominent role of energetic materials has been undervalued within the broader defense acquisition ecosystem. Treated largely as commoditized components rather than critical technological discriminators, the domestic production capability for these materials has severely atrophied. Consequently, the United States faces acute structural vulnerabilities across its commercial Defense Munitions Industrial Base (DMIB) and its government-owned Organic Industrial Base (OIB).

The National Energetics Plan, officially released in May 2023 by the Office of the Under Secretary of Defense for Research and Engineering (OUSD(R&E)), represents a comprehensive, systemic effort to correct this downward trajectory.¹ The plan details the specific strategic and material actions required to maintain technical superiority, efficiently transition advanced energetics into operational use, and sustain a robust industrial base capable of meeting wartime surge requirements.¹ The present strategic environment, characterized by protracted, high-intensity conventional operations in Eastern Europe and the pacing threat of the People’s Republic of China (PRC) in the Indo-Pacific, has exposed the brittle nature of the United States’ supply chains. This reality has highlighted a dangerous dependency on foreign-sourced critical chemicals and a domestic manufacturing infrastructure that has been heavily degraded by decades of under-investment and market consolidation.²

This report evaluates the operational framework of the National Energetics Plan, assessing its core components, the structural risks inherent in the current acquisition environment, and the probability that the plan’s strategic objectives will be met. Furthermore, it outlines the necessary statutory, cultural, and financial actions required to secure the domestic supply chain. Recent defense initiatives, such as the public-private Munitions Campus infrastructure model and the establishment of the Wartime Production Unit (WPU), indicate a significant paradigm shift toward rapid capability expansion.⁴ However, deeply entrenched bureaucratic inertia, programmatic risk aversion within acquisition offices, and inconsistent funding profiles threaten to impede the transition of next-generation high-performance materials, such as CL-20, into the active military stockpile.⁶ Ultimately, achieving the objectives of the National Energetics Plan will depend not merely on discrete capital injections, but on a holistic, sustained realignment of the entire defense capability development and acquisition ecosystem.

2. Origin and Strategic Mandate of the National Energetics Plan

The National Energetics Plan emerged from a growing consensus within the defense, intelligence, and legislative communities that the United States was falling precipitously behind peer competitors in the basic research, development, and fielding of high-performance energetic materials.¹ Mandated by prior defense authorization cycles, the plan was systematically formulated through the collaborative analytical efforts of seven senior executive-led working groups.¹

The Lifecycle Analytical Framework

These interagency working groups integrated representatives from across the military services, the Missile Defense Agency (MDA), the National Institute of Standards and Technology (NIST), the Department of Energy’s National Nuclear Security Administration (DOE-NNSA), and the National Aeronautics and Space Administration (NASA).¹ To ensure a comprehensive assessment, the analytical methodology of the plan was organized strictly around the chronological lifecycle of weapon systems. By dividing the problem set into distinct phases—from early-stage basic research occurring in Science and Technology (S&T) Budget Activities 1, 2, and 3, through to full-scale production, operational deployment, and eventual demilitarization—the working groups were able to identify distinct friction points that have historically stranded promising chemical formulations.¹

Historically, defense planning has compartmentalized energetics development across the individual military services and various defense agencies. This siloed approach has resulted in duplicative research efforts, inefficient capital allocation, and an inability to present a unified, sustained demand signal to the commercial chemical industry.⁷ The plan specifically notes that over the last several decades, energetic materials have been taken for granted, minimized in their innovation, and treated as legacy commodities.²

The Call for a Strategic Responsible Authority

To resolve these systemic operational inefficiencies and coordinate a whole-of-government response, a central recommendation of the National Energetics Plan is the establishment of a strategic energetics responsible authority.¹ This proposed governing body is intended to conduct continuous oversight, provide top-down strategic direction, and support the overarching development of the Department of Defense’s energetics competency.¹ Without a singular, accountable entity driving the transition of advanced chemistry from the laboratory to the production line, the plan argues that the United States will remain trapped in a cycle of iterative, marginal improvements to legacy World War II-era formulations, rather than achieving the disruptive leaps in capability necessary for future combat operations.

3. Structural Vulnerabilities: The Valley of Death and Acquisition Friction

A core finding of the National Energetics Plan is that the failure to field new capabilities is rarely a failure of American scientific ingenuity; rather, it is a failure of the defense acquisition architecture. The transition of novel energetics from the laboratory into active Programs of Record (PoR) is fraught with structural hurdles, commonly referred to in defense acquisition as the “valley of death.”

Misaligned Timelines and Coordination

A persistent, structural disconnect exists between the Science and Technology communities developing novel energetics and the acquisition Program Offices responsible for fielding operational systems. The National Energetics Plan identifies that there is insufficient coordination and misaligned timelines between these two communities, which severely stifles the transition of advanced energetics into operational use.¹ The S&T community often operates on long-term discovery timelines, while Program Offices are constrained by rigid fielding schedules and immediate operational requirements. Consequently, when a new energetic material reaches a baseline level of technological maturity, there is rarely a corresponding acquisition program ready or willing to absorb it into its design baseline.

Unfunded Qualification Burdens

The regulatory, safety, and environmental qualification processes for energetic systems are uniquely rigorous compared to other defense components. Unlike software or solid-state electronics, energetic materials are inherently volatile chemical compounds designed to detonate or combust. The costs associated with certifying a new energetic material for operational use—ensuring it meets Insensitive Munitions (IM) standards, environmental regulations, and long-term storage stability requirements—are immense.¹ The National Energetics Plan highlights that these qualification costs are frequently not accounted for in initial Research and Development budgets, nor are they absorbed by the procurement budgets of acquisition programs.¹ This creates a funding vacuum, effectively disincentivizing both government researchers and commercial industry from attempting to operationalize novel materials.

Antiquated Test and Evaluation (T&E) Infrastructure

Compounding the qualification burden is the state of the physical testing infrastructure. Existing Test and Evaluation standards, methodologies, and physical infrastructure are deeply antiquated.¹ Current ranges and instrumentation are optimized for legacy materials and are often inadequate for accurately characterizing the advanced blast effects, extended range potentials, and specific target lethality mechanisms of next-generation energetics.¹ As experts from the Energetics Technology Center (ETC) point out, testing these compounds is expensive, time-consuming, and outdated; the inability to adequately test new materials acts as a hard physical barrier to moving technology from one readiness level to the next.⁸

The Cultural Impediment: Programmatic Risk Aversion

Beyond physical infrastructure and funding lines, the National Energetics Plan and corollary assessments identify a profound cultural barrier to modernization. Program Managers (PMs) and Program Executive Officers (PEOs) operate under strict cost, schedule, and performance parameters mandated by Congress and the Department of Defense. The integration of a novel energetic material into a major weapon system introduces significant technical and programmatic risk. Consequently, acquisition professionals are often unwilling to jeopardize their program’s success on transformative but unproven chemical capabilities, preferring instead to iterate on highly predictable legacy formulations.² This institutional risk aversion creates a self-reinforcing cycle of technological stagnation that is highly resistant to top-down policy directives.

4. Market Consolidation and DMIB Fragility

The commercial Defense Munitions Industrial Base (DMIB) and the government-owned Organic Industrial Base (OIB) are currently characterized by systemic fragility, lacking the necessary elasticity to respond to the wartime surge requirements expected in a near-peer conflict.² A comprehensive assessment by the Army Science Board revealed that the true state of the munitions industrial base has been obscured for decades by faulty planning assumptions and a prioritization of peacetime economic efficiency over strategic resilience.²

The Erosion of the Industrial Base

Reviving the defense industrial base requires confronting the reality that the United States’ overall industrial capacity has grown at a slower rate than the broader economy, with manufacturing accounting for just 10 percent of GDP in 2024, down from 16 percent in 1997.⁹ A considerable share of this industrial decline has been concentrated in the defense sector, which saw defense-related employment fall by 2.1 million between 1985 and 2021.⁹ Decades of under-investment have left the industrial base strained, overly consolidated, and at high risk of failing to keep pace with modern threats in a protracted conflict.⁹

Market Consolidation and Single Points of Failure

The defense energetics sector, in particular, is a highly consolidated and brittle market. Over the past three decades, more than 50 major mergers and acquisitions have reduced the number of prime contractors operating within the DMIB to just five primary entities.² This hyper-consolidation at the prime contractor level has cascaded down the lower tiers of the supply chain, squeezing out mid-sized chemical manufacturers and specialized component vendors.

The result is a supply chain riddled with critical bottlenecks. The Army Science Board estimates that there are over one hundred single points of failure throughout the munitions supply chain.² When a single commercial vendor represents the entirety of the domestic production capacity for a specific precursor chemical, any disruption—whether due to natural disaster, financial insolvency, regulatory shutdowns, or targeted adversarial cyber-attacks—can immediately halt the production of multiple critical weapon systems across all branches of the military.

To systematically understand and map these vulnerabilities, the Department of Defense relies heavily on the Critical Energetic Materials Working Group (CEMWG).¹⁰ The CEMWG continuously monitors the supply chain to identify the most critical chemicals required for kinetic production, using this prioritized intelligence to inform fiscal year funding, direct Defense Production Act (DPA) Title III investments, and guide strategic stockpiling decisions.¹⁰

5. Supply Chain Fragility and Foreign Dependency

A paramount vulnerability explicitly identified by the National Energetics Plan, the Army Science Board, and subsequent defense audits is the heavy reliance on foreign sources—primarily the People’s Republic of China—for critical energetic precursors and strategic minerals.²

The geopolitical implications of this reliance are severe and immediate. Upstream chemical chokepoints allow hostile or competitive actors the theoretical capacity to control, restrict, or entirely embargo chemical precursors, thereby severely restricting the United States’ ability to manufacture finished munitions during a crisis scenario.¹² This vulnerability is compounded by the Defense Department’s historical reluctance to stockpile precursor materials, relying instead on “just-in-time” commercial logistics models that are highly efficient in peacetime but fail catastrophically under the stress of wartime consumption rates.²

Recent exogenous variables—most notably the heavy expenditure of munitions in Ukraine and the accelerating military modernization of the PRC—have forced legislators and defense planners to recognize that supply chain resilience is a core component of deterrence.³

To counter these vulnerabilities, the Department of Defense is deploying substantial capital to stand up domestic manufacturing for a wide array of specialized precursor chemicals identified by the CEMWG and the broader Energetic Materials Technology Working Group (EMTWG).¹³

The table below outlines a selection of critical chemicals and recent Department of Defense funding awards intended to reshore their production capabilities, reflecting a $192.5 million initiative to establish domestic manufacturing ¹³:

These targeted investments signify a departure from passive market reliance. By directly subsidizing the capital expenditures required to build chemical manufacturing plants, the government is attempting to rapidly reconstruct the foundational layers of the energetics supply chain that were outsourced over the previous three decades.

6. The Competitive Disadvantage: CL-20 and the Shifting Balance of Power

The consequences of structural vulnerabilities, unfunded testing mandates, and cultural risk aversion are most starkly evident in the United States’ failure to transition advanced high-explosives into the operational stockpile. While the United States has prioritized safety, stability, and cost reduction over pure lethality since the dissolution of the Soviet Union, peer adversaries have aggressively pursued basic research in high-performance energetics.⁶

The Trajectory of CL-20

The energetic material hexanitrohexaazaisowurtzitane, universally referred to within the industry as CL-20, serves as the primary case study for this technological lag. Developed in 1987 at the United States Navy’s China Lake research and engineering facility, CL-20 offers profound improvements in explosive performance over legacy materials like RDX and HMX.⁶ It provides greater metal-pushing capabilities, enhanced blast pressures, and increased propellant specific impulse.¹⁵ The widespread incorporation of CL-20 could substantially enhance the kinetic range, terminal lethality, stealth profile, and overall survivability of modern precision-strike and missile systems.¹⁶

Despite being an American invention with clear, validated operational benefits, CL-20 has only seen highly specialized, limited application and has not been transitioned into United States weapon systems at a large scale.⁶ The shift in national munitions priorities after the Cold War redirected focus away from maximizing lethality and toward enhancing Insensitive Munitions (IM) compliance to reduce accidental detonations. This policy shift, combined with a lack of specific, centralized funding to mature the synthesis process of CL-20 for cost-effective industrial production, means that US forces continue to rely on baseline energetic materials that largely trace their developmental origins to the Second World War.⁶

Adversarial Advancements

Conversely, the defense industrial bases of the PRC and the Russian Federation have recognized the strategic asymmetric advantage provided by novel energetics. Unburdened by the same degree of peacetime commercial market dynamics, state-directed scientists in these nations have aggressively pursued the industrialization of CL-20 and similar compounds.⁶ By experimenting with and producing more powerful energetic materials at scale, the PRC has theoretically enabled its baseline munitions to travel longer distances and achieve greater target destruction upon impact.³ This advancement directly challenges US operational stand-off distances, particularly in the vast maritime expanses of the Indo-Pacific theater, where missile range is the paramount tactical variable.³

Legislative and RDT&E Responses

Recognizing this critical shortfall as a matter of national security, recent defense authorization legislation has mandated direct intervention. Congress directed a pilot program to aggressively integrate CL-20 as the primary energetic material in selected weapon systems to empirically evaluate the improvements in performance against the integration costs.¹⁶

To support these mandates, the Research, Development, Test, and Evaluation (RDT&E) budget for Fiscal Year 2026 includes specific, expanded allocations. The Joint Munitions Technology program (PE 0602000D8Z) is funded to conduct performance evaluations of CL-20 based explosives and develop scaled-up process methodologies to validate applications in targeted warhead and propulsion systems.¹⁵ Furthermore, Lethality Technology programs are advancing computational chemistry tools to predict the influence of CL-20 on structures and critical logistical targets.¹⁸ However, the physical execution of these mandates has faced friction rooted in institutional bureaucracy, underscoring the extreme difficulty of altering long-standing acquisition baselines.¹⁷

7. Strategic Mitigation: Infrastructure Modernization and the Munitions Campus

To address the physical constraints of the industrial base and bypass the capital limitations of commercial industry, the Department of Defense is executing a major strategic shift. Rather than relying solely on isolated, bespoke facility construction, the government is pioneering collaborative, public-private infrastructure models. The flagship initiative in this strategic evolution is the “Munitions Campus.”

The Hub-and-Spoke Ecosystem

Led by the Office of the Assistant Secretary of Defense for Industrial Base Policy through its Manufacturing Capability Expansion and Investment Prioritization (MCEIP) office, the Munitions Campus is designed around a novel “hub-and-spoke” architectural model.⁸

At the center of this industrial hub are capital-intensive, government-supported testing and evaluation facilities. Because testing volatile chemical compounds is a dangerous, highly regulated, and prohibitively expensive necessity for transitioning technology, these centralized facilities absorb the heaviest capital burdens.⁸ The “spokes” of this ecosystem consist of various private defense companies—ranging from agile, venture-backed start-ups to established prime contractors—that co-locate on the campus to utilize these shared, specialized tools.¹⁹ By centralizing the testing and regulatory infrastructure, the Munitions Campus model drastically lowers the barrier to entry for commercial firms, reduces their internal capital expenditure requirements, and dramatically accelerates the timeline from early-stage prototype to full-scale operational production.⁵

Operationalizing the Model: The Indiana National Security Industrial Hub

The Munitions Campus concept successfully transitioned from a theoretical policy framework to physical reality in early 2026. On February 19, 2026, the American Center for Manufacturing & Innovation (ACMI) officially broke ground on the first National Security Industrial Hub (NSIH) in Bloomfield, Indiana.⁵ Strategically located adjacent to the Naval Surface Warfare Center – Crane Division (NSWC Crane) and the Crane Army Ammunition Activity, the campus is supported by a foundational $75 million Defense Production Act Title III award from the Department of Defense, aimed at stimulating private capital for specialty facilities.⁵

The anchor tenant for this expansive 1,100-acre development is Prometheus Energetics, a specialized merchant supplier of solid rocket motors (SRMs) and energetic compounds.²¹ Prometheus was established as a strategic joint venture between United States-based Kratos Defense & Security Solutions and Israel’s RAFAEL Advanced Defense Systems.²¹ Backed by an initial $175 million private capital commitment, Prometheus is constructing its corporate headquarters and main SRM manufacturing facility on 600 acres of the campus site.²¹

Projected to reach initial operational capacity in 2027, the Prometheus facility aims to close critical gaps in America’s propulsion manufacturing base.²³ By leveraging Kratos’ expertise in advanced propulsion and RAFAEL’s combat-proven energetics technologies (utilized in systems like Iron Dome and David’s Sling), the joint venture adapts advanced energetics for US platforms under secure, domestic control.²¹ This project perfectly exemplifies the strategic intent of the National Energetics Plan: utilizing targeted government funding to attract and stimulate significant private capital investment, thereby clustering industrial capacity in one location to enable faster, highly resilient, and cost-effective supply chains.⁴

Recapitalizing the Organic Industrial Base (OIB)

In parallel with expanding the commercial sector via the Munitions Campus, the Department of Defense is executing a massive, long-term recapitalization of its government-owned Organic Industrial Base. The Army has initiated a comprehensive 15-year modernization plan for its ammunition plants and depots, designed to bring aging, Cold War-era infrastructure up to modern safety and efficiency standards while significantly expanding surge capacity.²

A critical focal point of this effort is the $400 million investment directed at the Radford Army Ammunition Plant.²⁷ This specific modernization project targets the expansion of nitrocellulose production capacity. Nitrocellulose is a fundamental precursor required for almost all conventional propellants and explosives. By restoring organic capacity for this vital priority chemical, the Department aims to directly mitigate the severe strategic risks associated with procuring explosive precursors from external, potentially vulnerable sources.²⁷ The estimated resource requirements for broader Army ammunition plant modernization underscore the immense scale of the necessary recapitalization, with projected funding needs of $644 million in FY 2025, scaling up to $863 million in FY 2026, and reaching $1.29 billion by FY 2027.²⁷

8. Bureaucratic Reorganization and Implementation Vectors

Executing a plan as complex as the National Energetics Plan requires navigating a deeply entrenched bureaucratic environment. Recognizing that existing structures were insufficient to drive rapid change, the Department of Defense has established multiple cross-functional entities designed to break down institutional silos, streamline acquisition processes, and expedite capability fielding.

Key Organizational Entities in the Energetics Ecosystem

The current interagency and departmental ecosystem responsible for tracking, funding, and transitioning energetics capabilities involves several highly specialized groups and offices.⁴

The Role of JPAC and the Wartime Production Unit (WPU)

A critical development in accelerating production is the evolution of the Joint Production Accelerator Cell (JPAC). Originally designed to provide high-level analysis to leadership regarding operational requirements and material shortfalls, JPAC’s mission is being integrated into a more aggressive framework.²⁷ The Department is combining JPAC’s analytical focus on mitigating production bottlenecks with specialized contracting teams to create the Wartime Production Unit (WPU).⁴ The WPU is explicitly tasked with managing the direct support of urgent acquisition production priorities, shifting the procurement culture away from peacetime efficiency and toward a “war footing” capable of surging American manufacturing capacity at the speed of relevance.⁴

9. Funding Alignments and Legislative Support

Congressional intent has largely aligned with the strategic priorities established in the National Energetics Plan, as evidenced by specific programmatic increases and reprogramming actions across recent appropriation cycles. For fiscal years 2024 through 2026, consistent budget enhancements have been directed toward energetics resilience and basic research.

Key discretionary funding increases explicitly labeled in execution and reprogramming documents demonstrate a multi-pronged approach to the problem:

• An $8 million direct programmatic increase specifically designated to support the execution of the “national energetics plan”.³⁰
• A $4 million targeted increase for “sustainable energetic materials manufacturing,” emphasizing the need for modern, environmentally compliant, domestic production methodologies that do not rely on toxic legacy processes.³⁰
• A $19 million program increase specifically targeting “energetics capacity for solid rocket motors,” reflecting the urgent, high-volume demand generated by advanced kinetic systems like precision guided multiple launch rocket systems.³²
• Targeted RDT&E increases, including a $4 million program increase for “advanced energetics for deeply buried targets” in FY26.²⁹

Furthermore, broad legislative efforts to maintain force readiness, such as the use of authorities under Section 614 and Section 621 of Public Law 118-131, provide millions in incentive bonuses to retain the necessary personnel and warfighter readiness required to operate these advanced systems.³² Legislative frameworks, such as the support voiced during the debate of the “One Big Beautiful Bill for America,” indicate a continued willingness to deploy significant federal funding—potentially including an additional $150 million—to bolster efforts like the Munitions Campus.²⁵

Under the purview of the Office of the Assistant Secretary of Defense for Industrial Base Policy, the MCEIP office obligated massive capital in FY 2024, deploying $533.98 million through the Defense Production Act and $892.07 million through the IBAS program for kinetic capabilities and critical materials.²⁷ These investments represent the tangible financial backing necessary to transition the objectives of the National Energetics Plan from theoretical policy frameworks into active, pouring-concrete industrial capacity.²⁷

10. Probability of Success and Systemic Risks

Evaluating the true probability that the United States will successfully meet the objectives outlined in the National Energetics Plan requires weighing substantial positive momentum against deeply entrenched institutional and structural headwinds.

Tailwinds: Indicators of Probable Success

The likelihood of success is strongly bolstered by an unprecedented convergence of strategic necessity, intelligence validation, and political will. The ongoing conflicts in Ukraine and the Middle East have provided undeniable, empirical evidence regarding the extreme burn-rates of modern munitions in high-intensity combat, shattering previous peacetime assumptions regarding stockpile sufficiency.² This undeniable reality has forced a bipartisan acknowledgment of the crisis, resulting in the robust funding allocations detailed previously.

The rapid materialization of the Munitions Campus in Indiana serves as a powerful leading indicator that the Department of Defense is capable of executing novel, agile acquisition strategies that successfully attract substantial private capital.⁵ By securing entities like Prometheus Energetics, the government is successfully sharing the immense capital risk of establishing heavy manufacturing infrastructure. Furthermore, the systematic, data-driven identification of supply chain vulnerabilities by the CEMWG demonstrates a mature analytical capability that is now actively directing DPA Title III funds to close specific, identified chemical gaps, rather than relying on generalized, untargeted industrial subsidies.¹⁰

Headwinds: Systemic Risks to Implementation

Conversely, the risks to the National Energetics Plan are predominantly cultural, bureaucratic, and fiscal. The notable delay in fully operationalizing the Joint Energetic Transition Office (JETO) suggests that inter-service rivalries, jurisdictional disputes, and general organizational inertia continue to hamper centralized oversight.¹⁷ If the Department cannot successfully enforce a unified demand signal across all military branches, the commercial chemical industry will remain highly hesitant to invest their own capital in unproven formulations.

Additionally, the acquisition culture within the Pentagon remains fundamentally risk-averse. Unless the institutional incentive structures for Program Managers and PEOs are radically altered to reward the successful transition of high-performance materials like CL-20—rather than exclusively prioritizing cost containment, risk avoidance, and schedule adherence on legacy systems—the technological gap with peer adversaries will persist.²

Finally, the defense industrial base remains highly sensitive to fluctuations in the federal budget cycle. Continuing Resolutions (CRs) and unpredictable appropriation timelines severely disrupt the long-term capital planning necessary for chemical manufacturing, which inherently requires sustained, multi-year investment horizons.

11. Strategic Imperatives: What Must Be Done

To ensure the National Energetics Plan successfully achieves its mandate of restoring United States technical superiority and deep industrial resilience, the Department of Defense and Congress must execute a series of targeted, sustained interventions.

1. Mandate and Fund Flexible Pilot Plants

As heavily recommended by the Army Science Board, the establishment of “flexible pilot plant lines” is a vital operational imperative.² The transition from laboratory-scale chemical synthesis (producing grams of a new material) to full-scale industrial production (producing tons safely and reliably) is a highly volatile and complex engineering challenge.⁸ Flexible, government-funded pilot facilities would allow the defense enterprise to aggressively de-risk new explosive syntheses and mature advanced manufacturing technologies before requiring commercial prime contractors to scale them, bridging a critical gap in the “valley of death”.²

2. Institute Multi-Year Procurement Authority for Energetics

The commercial chemical industry cannot logically justify the massive capital expenditures required to build specialized, hazardous energetics facilities based on unpredictable, single-year Department of Defense contracts. Congress must aggressively authorize and utilize multi-year procurement (MYP) deals for munitions, particularly those with funding caps exceeding $500 million, to establish minimum sustaining rates for critical production lines.² This approach provides the long-term demand predictability necessary for the private sector to confidently invest in workforce development, facility modernization, and supply chain redundancy.⁴ The Department’s strategy to stabilize demand signals via the Wartime Production Unit is a necessary step in this direction.⁴

3. Overhaul Test and Evaluation (T&E) Infrastructure

The modernization of energetic materials must be tightly coupled with the modernization of the environments in which they are tested. Current T&E standards are antiquated and often fail to capture the multi-domain effects of next-generation kinetic systems.¹ The Department must continue to aggressively fund scalable, operationally realistic test environments—such as the Enhanced Environment for Multi Domain Operations Cybersecurity Testing (EEMDO)—that can accurately validate the performance, terminal lethality, and cyber-resilience of new formulations under highly contested conditions.³⁶ Furthermore, the Munitions Campus model should be replicated to establish additional regional testing hubs, further eliminating the testing bottleneck for emerging commercial industry players.¹⁹

4. Empower Centralized Energetics Governance

The core recommendation of the National Energetics Plan—to establish a strategic energetics responsible authority—must be fully and aggressively realized.¹ The Joint Energetic Transition Office (JETO) must be untangled from bureaucratic delays, elevated in its reporting structure, and granted the statutory authority and dedicated funding lines required to force the integration of novel energetics across the joint force.¹⁷ This authority must act as a single point of accountability for tracking the lifecycle of energetics from basic S&T research through to the final integration into major weapon systems, ensuring that capabilities like CL-20 are no longer stranded by programmatic risk aversion.⁶

5. Secure Upstream Chemical Supply Chains

While the high-profile efforts to establish domestic production of finished energetics and solid rocket motors are critical, the vulnerability of upstream raw materials remains acutely dangerous. The Department of Defense, guided by the continuous data streams of the Critical Energetic Materials Working Group (CEMWG), must expand its strategy to secure alternative global sources or develop deep domestic synthesis capabilities for foundational elements. This includes securing the supply lines for titanium, specialized binders like HTPB, rare earth elements, and high-grade nitrocellulose precursors.² The utilization of DPA Title III and IBAS authorities must be continuously aggressive, proactive, and targeted to successfully isolate the United States’ supply network from reliance on the PRC and other strategic competitors.³

The successful implementation of the National Energetics Plan represents a vital inflection point for the defense industrial base. The current alignment of deep analytical rigor, sustained congressional funding, and highly innovative public-private infrastructure models provides a viable, strategic pathway to mitigating the severe vulnerabilities currently inherent in the munitions supply chain. Executing this complex industrial transition is a non-negotiable prerequisite for the long-term sustainment of the nation’s kinetic deterrence capabilities.

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23. Kratos & RAFAEL Establish Prometheus Energetics Joint Venture, a U.S.-Based Merchant Supplier of Solid Rocket Motors, accessed April 25, 2026, https://www.kratosdefense.com/newsroom/kratos-rafael-establish-prometheus-energetics-joint-venture-a-u-s-based-merchant-supplier-of-solid-rocket-motors
24. Prometheus Energetics to Establish an Approximate 550 Acre Solid Rocket Motor and Munitions Production Facility in Indiana as Part of DOD’s Munitions Campus Pilot Program Led by the American Center for Manufacturing & Innovation – ACMI Group, accessed April 25, 2026, https://acmigroup.com/2025/03/07/acmi-prometheus-in/
25. Chairman Wicker and Sen. Banks Commend Groundbreaking of New Munitions Campus in Indiana, accessed April 25, 2026, https://www.wicker.senate.gov/2026/3/chairman-wicker-and-sen-banks-commend-groundbreaking-of-new-munitions-campus-in-indiana
26. Prometheus Energetics Breaks Ground on New Solid Rocket Motor Manufacturing Campus in Indiana – PR Newswire, accessed April 25, 2026, https://www.prnewswire.com/news-releases/prometheus-energetics-breaks-ground-on-new-solid-rocket-motor-manufacturing-campus-in-indiana-302693326.html
27. NDIS Implementation Plan ii – GovInfo, accessed April 25, 2026, https://www.govinfo.gov/content/pkg/GOVPUB-D-PURL-gpo234260/pdf/GOVPUB-D-PURL-gpo234260.pdf
28. GAO-25-107016, NATIONAL NUCLEAR SECURITY ADMINISTRATION: Explosives Program Is Mitigating Some Supply Chain Risks but Should Take Additional Actions to Enhance Resiliency, accessed April 25, 2026, https://files.gao.gov/reports/GAO-25-107016/index.html
29. FY26 DEF JES – Senate Appropriations Committee, accessed April 25, 2026, https://www.appropriations.senate.gov/imo/media/doc/fy26_def_jes.pdf
30. department of defense dd 1414 base for reprogramming actions division a of public law 118-47, department, accessed April 25, 2026, https://comptroller.war.gov/Portals/45/Documents/execution/FY_2024_DD_1414_Base_for_Reprogramming_Actions.pdf
31. Congressional Record – GovInfo, accessed April 25, 2026, https://www.govinfo.gov/content/pkg/CREC-2024-03-22/pdf/CREC-2024-03-22-bk2.pdf
32. DIVISION -DEPARTMENT OF DEFENSE APPROPRIATIONS ACT, 2024 The following is an explanation of the effects of this Act, which makes, accessed April 25, 2026, https://docs.house.gov/billsthisweek/20240318/Division%20A%20Defense.pdf
33. Calendar No. 470 – Senate Appropriations Committee, accessed April 25, 2026, https://www.appropriations.senate.gov/download/fy25-fsgg-senate-report
34. Congressional Record, Volume 170 Issue 51 (Friday, March 22, 2024) – GovInfo, accessed April 25, 2026, https://www.govinfo.gov/content/pkg/CREC-2024-03-22/html/CREC-2024-03-22-pt2-PgH1501.htm
35. Congressional Record, Volume 171 Issue 37 (Tuesday, February 25, 2025) – GovInfo, accessed April 25, 2026, https://www.govinfo.gov/content/pkg/CREC-2025-02-25/html/CREC-2025-02-25-pt1-PgH791-3.htm
36. SERVICEMEMBER QUALITY OF LIFE IMPROVEMENT AND NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL YEAR 2025 R E P O R T COMMITTEE ON A, accessed April 25, 2026, https://www.nationalguard.mil/Portals/31/Documents/PersonalStaff/LegislativeLiaison/FY25/FY25%20NDAA%20Report%20(H.R.%208070).pdf

1. Executive Summary

The United States Department of Defense (DoD) is executing a profound strategic pivot toward the deployment of attritable, autonomous systems, most notably through the Replicator initiative. The objective is to rapidly field multiple thousands of uncrewed systems across all warfighting domains to counter the mass and scale of adversarial forces, specifically addressing the pacing challenge presented by the People’s Republic of China in the Indo-Pacific. However, while capital allocation and technological development—such as artificial intelligence integration, algorithmic autonomy, and advanced sensor payloads—are heavily prioritized, the defense apparatus risks overlooking the foundational physical requirement of this strategy: the specialized human capital required to physically manufacture these systems at scale.

Hardware scales differently than software. The production of reliable, combat-ready uncrewed aerial systems (UAS) relies on a complex network of physical manufacturing facilities and, crucially, a highly specialized blue-collar workforce. The current defense industrial base (DIB) is severely constrained by critical deficits in roles such as composite technicians, precision solderers, computer numerical control (CNC) machinists, and quality assurance (QA) inspectors. Furthermore, the challenge extends beyond initial recruitment; the sector is facing a severe retention crisis, exacerbated by security clearance delays, International Traffic in Arms Regulations (ITAR) constraints, and direct labor competition from other critical defense sectors, such as nuclear shipbuilding and conventional munitions manufacturing.

To successfully enable warfighters and achieve the strategic goals of the Replicator initiative, DoD leadership must recognize that the limiting factor in drone proliferation is no longer solely sensor capability or software architecture, but rather the availability of cleared, skilled technicians capable of physical assembly and rapid manufacturing iteration. This report details the specific workforce deficits constraining drone manufacturing, analyzes the systemic retention and facility scaling challenges, and provides strategic context to fortify the human capital foundation of the American defense industrial base. The analysis demonstrates that without parallel investments in the blue-collar workforce, the United States risks developing advanced drone architectures that it simply lacks the manpower to build in the volumes required for modern deterrence.

2. The Strategic Context: The Paradigm Shift to Attritable Mass

For decades, the United States defense acquisition system has optimized for “exquisite” platforms: highly capable, highly survivable, and extremely expensive systems produced in low volumes, such as fifth-generation fighter aircraft, advanced destroyers, and strategic bombers.¹ The national manufacturing infrastructure and workforce training pipelines were built to support this model, prioritizing perfection, decades-long lifecycles, and exacting military specifications over speed and volume. This paradigm, while effective for maintaining qualitative superiority, presents critical vulnerabilities against adversaries capable of generating quantitative mass.²

The modern battlefield, particularly as observed in the ongoing conflict in Ukraine, has demonstrated a fundamental shift in the character of war. Uncrewed systems are no longer utilized solely as niche enablers or high-altitude surveillance assets operating in uncontested airspace; they are central instruments of kinetic warfare, functioning as primary reconnaissance networks, artillery spotters, and loitering munitions.¹ In this environment, the strategic advantage shifts toward the force capable of deploying large volumes of uncrewed assets. Large fleets of low-cost, attritable drones create operational dilemmas for adversaries, forcing them to exhaust expensive air defense interceptors on inexpensive, easily replaceable targets.²

2.1 The Replicator Initiative and Production Realities

In response to these shifting dynamics, the DoD launched the Replicator initiative in August 2023. Unveiled by Deputy Defense Secretary Kathleen Hicks, Replicator aims to rapidly field thousands of attritable autonomous systems across multiple domains within an aggressive 18-to-24-month timeframe.² The initiative leverages commercial technology, robotics, and artificial intelligence to offset the mass of the People’s Liberation Army (PLA).² Executed in phases, Replicator 1.1 and 1.2 have focused on the selection of maritime and aerial drones, alongside associated counter-drone assets, for mass domestic manufacturing.⁸

However, achieving this goal requires a manufacturing base capable of hyperscaling production. The commercial drone production ecosystem, which naturally underwrites military capability through economies of scale, learning effects, and rapid adaptation, is currently dominated by foreign competitors.¹ The domestic U.S. drone industrial base remains fragmented, expensive, and constrained by vulnerable supply chains.¹ Transitioning from an “exquisite” to an “attritable mass” paradigm requires fundamental changes in how facilities operate and how labor is deployed. The strategic intent of Replicator is sound, but it operates within an industrial base that is currently poorly suited to the mass production of inexpensive, expendable weapons.¹

2.2 Cost Economics: Exquisite versus Attritable Systems

The justification for transitioning toward unmanned systems frequently hinges on cost. Conventional wisdom asserts that UAS platforms are inherently cheaper because they eliminate the need for pilot life-support equipment, cabin pressurization, and ejection systems.¹⁰ However, evaluating the actual economics of scaling drone fleets requires a nuanced understanding of acquisition versus life-cycle operations and support (O&S) costs.

When comparing exquisite, large-scale systems, the cost advantages of unmanned platforms narrow significantly when recurring life-cycle costs are factored in.¹⁰ Data from the Congressional Budget Office illustrates this dynamic when comparing the unmanned RQ-4 Global Hawk to the manned P-8 Poseidon. While the RQ-4 featured a lower average acquisition cost ($239 million per aircraft compared to $307 million for a P-8), its life-cycle costs per flying hour were calculated at roughly $35,200, compared to $42,300 for the P-8.¹¹ This relatively narrow 17 percent difference in life-cycle costs is driven by the RQ-4’s shorter expected lifespan, intensive maintenance requirements, and higher historical attrition rates, which amortize the initial acquisition cost over fewer total flying hours.¹¹ Similarly, the MQ-9 Reaper, often cited as a cost-effective alternative to manned fighters, carries a total unit cost exceeding $120 million when evaluating a complete, operable Combat Air Patrol consisting of four air vehicles and associated ground control stations.¹³

These figures demonstrate why the Replicator initiative cannot simply rely on scaling existing legacy uncrewed systems. The economics change drastically only when analyzing “attritable mass” systems. The strategic value of small, highly modular drones is not derived from operating them for decades, but from utilizing them as expendable assets that impose disproportionate costs on adversaries.³ However, the primary bottleneck to achieving this economic advantage remains labor. If the human capital required to build these attritable systems is scarce, labor costs will inevitably rise, eroding the cost-per-unit advantage that makes the swarm strategy economically viable.

3. The Paradigm Shift from Legacy Aerospace to Iterative Manufacturing

The production of modern autonomous systems requires a departure from traditional aerospace manufacturing timelines. Traditional manufacturing relies on tooling-based rigidity, characterized by massive upfront investments in injection molds, dies, and static assembly lines.¹⁴ This model is designed for platforms that will remain largely unchanged in their physical geometry for years or decades.

Conversely, drones designed for contested environments must iterate rapidly to overcome adversarial countermeasures. Observations from the conflict in Ukraine indicate that drone technology becomes obsolete roughly every six weeks as adversaries adapt their electronic warfare, jamming, and kinetic interception tactics.¹⁵ This intense pressure for continuous, rapid design iteration requires a highly agile workforce capable of adapting to new airframes, payloads, and frequencies on a near-monthly basis.

[Image: A comparative workflow diagram showing the linear, multi-year production cycle of traditional aerospace platforms next to the rapid, circular 6-week iterative production loop required for attritable drones.]

To achieve this velocity, hardware manufacturing must evolve from mechanical rigidity to digital-first agility. This evolution leans heavily on additive manufacturing and modular design. Rather than investing up to $50,000 in a single injection mold, manufacturers are utilizing Large Format Additive Manufacturing (LFAM) to process low-cost polymer granulates, enabling the production of diverse drone sizes on the same equipment.¹⁵ Companies engaging in the Replicator initiative are demonstrating the ability to print, assemble, and fly long-range uncrewed aircraft with reconfigurable payloads with lead times as short as six weeks.¹⁸ This transition significantly alters the human capital requirements; the industry relies less on static assembly line workers and more on technicians who can seamlessly interact with digital warehouses, optimize toolpaths for additive systems, and manage rapid structural bonding processes.¹⁴

4. The Blue-Collar Deficit: Critical Bottlenecks in Drone Manufacturing

While artificial intelligence and advanced algorithms dictate the behavior of autonomous systems, the physical platforms must be manufactured, assembled, and inspected by humans. The defense sector is experiencing a massive talent gap in engineering; projections indicate a global shortage of semiconductor engineers exceeding one million by 2030, and the U.S. currently produces only a fraction of the aerospace engineers required to meet demand.¹⁹ However, this white-collar engineering deficit cascades downward, heavily impacting the blue-collar trades necessary for physical production. The shortage of specialized manufacturing labor is the most acute constraint on domestic aerospace expansion, directly threatening the ability to meet production targets of 10,000 or more UAS units per month.²⁰

4.1 Composite Technicians and Airframe Fabrication

To maximize flight endurance and payload capacity, drone airframes must achieve an exceptional strength-to-weight ratio. Traditional metal fabrication adds weight that destroys flight efficiency, while small-scale 3D printing often lacks the necessary structural integrity for high-stress maneuvers.¹⁷ Consequently, advanced uncrewed systems rely heavily on composite materials, primarily carbon fiber, fiberglass, and Kevlar.²²

The fabrication of these materials requires specialized composite technicians. The manufacturing process for composite drone frames is highly complex and manual. Technicians are responsible for preparing molds, performing precise hand layups of carbon fiber sheets, executing vacuum bagging to remove air voids, and managing the thermal curing processes required to solidify the resins.²⁴ Furthermore, post-cure processing involves trimming, sanding, and finishing the parts to meet exacting dimensional tolerances, often involving the integration of metal inserts and couplings for assembly.²²

Mistakes in fiber orientation, improper resin ratios, or flawed curing temperatures can lead to structural delamination under the extreme aerodynamic stress of flight.²⁵ Because cured carbon fiber cannot be easily drilled or machined without risking structural compromise or requiring highly specialized milling tools, the initial layup and molding must be executed with near perfection.²² As the industry attempts to scale, the reliance on weeks of skilled manual labor per unit for carbon fiber hand layup becomes a severe production bottleneck.¹⁷ Even as the industry adopts Large Format Additive Manufacturing to extrude polymer granulates (such as polypropylene and polyamide compounds) for larger airframes, technicians skilled in managing these advanced robotic systems, optimizing toolpaths, and performing post-processing are essential.¹⁷ The talent pipeline for these roles is remarkably narrow, with few vocational programs offering dedicated composite manufacturing training outside of legacy commercial aerospace hubs.²⁶

4.2 Precision Solderers and Electronics Assembly

Drones function fundamentally as highly mobile, flying sensor networks. The integration of flight controllers, electronic speed controllers (ESCs), optical payloads, and radio frequency communication modules relies on intricate printed circuit board (PCB) assembly.²⁸ While high-volume Surface Mount Technology (SMT) handles the automated placement of microchips, hand soldering remains an absolute necessity for through-hole components, heavy-duty battery connectors, mechanical mounts, selective operations, rework, and low-volume rapid prototyping.³⁰

In a combat or tactical environment, an uncrewed system is subjected to massive vibrational forces, rapid thermal cycling, and high-G maneuvers. A single “cold” solder joint or a microscopic fracture in a through-hole connection can result in catastrophic mid-air electrical failure.²⁹ Therefore, precision hand soldering requires far more than basic assembly capability; it requires a mastery of thermodynamics at a micro-scale. Technicians must maintain precise temperature control—often targeting 390°C for smaller joints and up to 450°C for larger battery connections—while managing flux application and dwell time to ensure complete hole fill and strong mechanical bonds without damaging adjacent, sensitive microelectronics.²⁹

The defense standard governing this work is the IPC J-STD-001 certification, which dictates the materials, methods, and stringent verification criteria for producing high-quality solder interconnections, specifically including space and aerospace applications.³¹ Acquiring and maintaining a workforce of certified precision solderers is exceptionally difficult. The commercial technology and telecommunications sectors heavily recruit individuals with these exact micro-electronics capabilities, often offering superior compensation packages without the restrictive environments, security protocols, or geographic limitations associated with defense contracting.¹⁹

4.3 Machinists, Tooling, and Iteration Agility

The rapid, six-week iteration cycle dictated by modern electronic warfare places immense pressure on CNC machinists and tool-and-die makers. In traditional manufacturing, creating an injection mold for a drone chassis component requires metal dies that can cost between $10,000 and $50,000, taking weeks or months to machine.¹⁴ If adversarial countermeasures require a change in payload shape, aerodynamic profile, or antenna housing, these expensive tools must be entirely remade.¹⁴

To achieve rapid iteration, machinists must transition from traditional long-term tooling to rapid prototyping methodologies. This involves utilizing advanced 5-axis CNC milling, precision sheet metal fabrication, and the creation of temporary molds from high-density milling foam or 3D printed polymers.¹⁵ This environment demands a workforce highly proficient in digital-first agility, capable of translating AI-driven Design for Manufacturability (DFM) outputs directly into machine code.¹⁴

However, the demographic reality of the machining profession poses a systemic risk. The median age for machinists in the United States is 45.7 years, with over 31 percent of the workforce aged 55 or older.³³ This indicates a looming retirement cliff that threatens to hollow out this critical capability precisely as the defense apparatus attempts to scale drone production to multiple thousands of units per month.³³

4.4 Quality Assurance and Inspection Personnel

The final critical blue-collar bottleneck resides in Quality Assurance (QA). Defense UAS components must perform reliably, requiring rigorous quality control integrated into every stage of production.³² This necessitates a workforce of trained inspectors capable of identifying microscopic defects in composite materials, utilizing non-destructive testing (NDT) methodologies, conducting electromagnetic interference (EMI) inspections, and verifying the integrity of complex mechanical and electrical assemblies.²⁴

The regulatory framework further complicates this process. DoD acquisitions operate under stringent QA guidelines, such as Federal Acquisition Regulation (FAR) Part 46 and Defense Federal Acquisition Regulation Supplement (DFARS) Part 246.³⁵ These regulations dictate extensive government and contractor inspection systems, ensuring that manufacturing processes, drawings, and engineering changes conform exactly to specified technical requirements.³⁵

While these comprehensive standards are vital for multi-million-dollar, decades-long platforms where human lives are directly at risk, applying the same heavy bureaucratic inspection regimes to $30,000 attritable drones slows production velocity to an unacceptable rate. QA inspectors must be specifically trained to navigate the nuances of verifying “smart and affordable mass.” They must ensure operational reliability without imposing exquisite-level perfectionism and MIL-SPEC rigidity that ultimately ruins the economics of attritability.³

4.5 Material Complexity and Supply Chain Dependencies

The workforce must also navigate highly complex supply chains and specialized raw materials. Drone production relies heavily on specific materials to achieve necessary power-to-weight ratios and endurance limits. For larger uncrewed systems, technicians must work with aluminum-silicon-copper piston alloys, steel or titanium valvetrain parts, and magnesium castings used to save weight.⁹ On the electronic side, energy storage defines endurance limits; each kilowatt-hour of battery capacity requires substantial amounts of copper, aluminum, graphite, and lithium-ion cells, while advanced radar and communication systems rely heavily on gallium-nitride electronics.⁹ The ability of the workforce to manage, process, and assemble these highly specific materials is fundamentally linked to the nation’s capacity to scale mass production.⁹

5. The Systemic Retention Crisis and Demographic Shifts

When defense policymakers and program managers discuss the manufacturing skills gap, the conversation is predominantly focused on recruitment pipelines: the lack of applicants, limited training slots, and poor awareness of manufacturing careers.³³ However, systemic federal data reveals that the DIB is suffering from a catastrophic retention problem. Defense manufacturers cannot simply hold onto the talent they spend years recruiting and training.³³

5.1 The Collapse of Occupational Tenure

According to Bureau of Labor Statistics (BLS) data, the median tenure in production occupations has suffered a severe decline, falling 21 percent from 5.2 years in 2014 to just 4.1 years in 2024.³³ In the specific manufacturing subsectors that feed defense supply chains—such as primary metals, fabricated metal products, and machinery manufacturing—tenure has dropped equally precipitously.³³ For machinery manufacturing specifically, median tenure fell from 6.2 years to 5.0 years over the same decade.³³

Simultaneously, the demographic distribution of the workforce is dangerously skewed. While over 31.4 percent of the machinist workforce is nearing retirement age, the 25-to-34 age cohort—the demographic essential for mid-career proficiency and transitioning into management or advanced technical roles—accounts for only 16.5 percent of the workforce.³³ The defense sector is steadily bleeding its mid-level talent, and data indicates that frontline and middle managers in aerospace and defense are twice as likely to leave their employers as individual contributors.³⁸

5.2 Security Clearances and ITAR Restrictions

The retention problem is exponentially more damaging to the defense industrial base than to the commercial sector due to the structural, regulatory barriers to hiring.³³ A commercial drone manufacturer facing turnover can replace a departing technician relatively quickly from the open labor market. A defense contractor producing specialized, export-controlled hardware cannot.

The defense labor pool is artificially restricted by the International Traffic in Arms Regulations (ITAR) and the Export Administration Regulations (EAR). Because drones, their software, and their manufacturing schematics frequently fall under the United States Munitions List (USML) or require strict export compliance, manufacturers are largely compelled to employ U.S. persons and restrict foreign national access entirely.³⁹ Losing a single highly skilled worker from this already small, restricted pool creates an immediate production vacuum.³³

Furthermore, workers engaged in sensitive defense programs require security clearances. When a cleared technician leaves, the replacement must undergo comprehensive background investigations, adjudication processes, and program read-ins. This bureaucratic process routinely takes six to twelve months, and sometimes longer.³³ During this gap, production lines must either slow down significantly or cannibalize cleared personnel from other critical programs. This introduces cascading schedule risks, particularly threatening to initiatives like Replicator that are operating on rigid, politically mandated 18-to-24-month deadlines.⁷

5.3 The Loss of Accumulated Technical Proficiency

Defense drone production, unlike mass consumer electronics, involves low-volume, high-complexity systems. Workers do not develop proficiency through the mindless, high-volume repetition of a standard commercial assembly line; they develop essential “muscle memory” through years of accumulated experience with specific composite materials, aerospace tolerances, and rigorous QA regimes.³³

When a machinist with 15 years of experience leaves the defense sector for the commercial tech sector, their unique expertise in preventing carbon fiber delamination, executing complex multi-axis CNC operations, or maintaining tight thermal controls during soldering is lost. This specialized proficiency cannot be instantly replaced by a recent community college graduate or a four-month accelerated training program.³³ The steady decline in median tenure means that the DIB is continuously operating with a workforce that has not yet reached peak technical maturity, resulting in higher defect rates, slower production times, and increased supply chain fragility.¹⁹

6. Facility Scaling and the Hyperscale Model

As the DoD demands production scaling from bespoke prototype quantities to multiple thousands of units per month, the physical footprint of the defense industrial base must radically expand. The transition from small-scale engineering laboratories to hyperscale manufacturing facilities introduces complex logistical and infrastructural hurdles.

6.1 The Transition to Hyperscale Infrastructure

Meeting the demands of affordable mass requires a departure from distributed, fragmented supply chains toward consolidated, massive-scale production hubs. The development of “Arsenal-1” by Anduril Industries in Pickaway County, Ohio, serves as a primary case study for this new industrial model. Designed as a hyperscale manufacturing facility specifically for autonomous systems and weapons, Arsenal-1 is planned to encompass over 1.7 million square feet of production space across multiple buildings, representing an investment of nearly $1 billion and expected to create over 4,000 direct jobs.⁴³

The strategic architecture behind Arsenal-1 emphasizes software-driven manufacturing, modular factory layouts, and staggered capacity scaling.⁴³ Rather than opening an entire campus simultaneously, the facility relies on a 10-year staggered buildout, allowing the company to scale intentionally to meet production demands without overextending capital.⁴³ This model deliberately eschews complex, rigid robotics in favor of deploying human capacity rapidly. As noted by industry executives, the intent is to avoid overly complex automation initially, focusing instead on bringing the workforce online to ramp production as fast as possible, standardizing processes to accommodate a rapid increase in output.⁴⁷ Efficient space utilization is paramount; modern layouts structure production, logistics, assembly, and testing under single, integrated roofs to accommodate multiple drone variants—such as First Person View (FPV) drones, loitering munitions, and cruise systems—on shared infrastructure.⁴⁸

6.2 The Burden of ITAR-Compliant Production Environments

While commercial drone manufacturers can scale operations relatively easily in standard light-industrial parks, defense drone manufacturing facilities must be built to withstand intense regulatory scrutiny. Creating a manufacturing environment capable of producing ITAR-controlled systems requires millions of dollars in physical and digital overhead that commercial entities do not face.³²

Facilities must implement robust physical safeguards to prevent unauthorized access. This includes segmented production areas, sophisticated visitor management systems, escorted access protocols, and advanced continuous surveillance.⁴⁹ On the digital front, technical data such as CAD drawings, manufacturing instructions, material specifications, and quality procedures must be held on air-gapped or heavily controlled networks featuring encrypted storage and strict need-to-know access validation.⁴⁹ Furthermore, achieving Cybersecurity Maturity Model Certification (CMMC) Level 2 physical and digital safeguards are often baseline requirements for handling Controlled Unclassified Information (CUI).⁴⁹

These extensive constraints dictate that scaling drone production is not simply a matter of acquiring real estate and installing CNC machines; it requires building highly secure fortresses of compliance. This environment inherently slows operational velocity and creates a massive administrative burden that deters smaller, highly innovative commercial drone startups from transitioning their dual-use technology into the defense sector.³²

7. Regulatory Frictions: Airspace, Spectrum, and Testing

Beyond the confines of the factory floor, the workforce is further constrained by domestic regulatory frameworks that complicate the testing and iteration phases of drone development. A drone cannot be effectively iterated every six weeks if the manufacturer cannot rapidly test the integrated systems in real-world conditions.

7.1 Airspace Restrictions and Testing Bottlenecks

The Federal Aviation Administration (FAA) strictly regulates the operation of small uncrewed aircraft systems (weighing less than 55 pounds) under 14 CFR Part 107.⁵¹ These regulations stipulate that operators must keep the drone within visual line of sight at all times, limiting the maximum allowable altitude to 400 feet above the ground, and restricting the maximum speed to 100 mph (87 knots).⁵¹ Furthermore, operations are generally restricted to daylight or twilight hours, and flights over people not directly participating in the operation are prohibited.⁵¹

While these rules are essential for civilian airspace safety, they present massive hurdles for defense manufacturers testing advanced autonomous swarm logic, long-range capabilities, and high-speed maneuvers. Manufacturers must either secure complex waivers from the FAA or transport personnel and equipment to specialized, geographically remote military test ranges. This geographic dislocation separates the engineering and assembly workforce from the testing environment, severely disrupting the rapid feedback loops required for iterative manufacturing.

7.2 Spectrum Allocation Challenges

Compounding the airspace issue is the allocation of radio frequency spectrum. Most domestic drone operations currently rely on unlicensed spectrum—the same frequencies utilized by consumer Wi-Fi routers and other devices, including the 900 MHz band, 2.4 GHz band, and 5.8 GHz band.⁵² As the DoD seeks to build drone dominance, the Federal Communications Commission (FCC) recognizes that these crowded, unlicensed bands are highly susceptible to interference and may not be viable for the intensive, large-scale UAS operations envisioned by the military.⁵²

The FCC is actively seeking to expand deployment by permitting UAS operations in flexible-use terrestrial bands typically reserved for mobile broadband, such as the 1.4 GHz, 2.3 GHz, and 3.7 GHz bands.⁵² Concurrently, the emergence of private 5G and LTE networks is providing dedicated connectivity layers for industrial sites, enabling the testing of automated, long-range drone missions with predictable coverage and low latency.⁵³ However, until dedicated spectrum and secure networks are fully integrated and accessible to the defense industrial base, the workforce is limited in its ability to test the electronic resilience of the systems they are assembling.

8. Cross-Sector Competition Within the Defense Industrial Base

A critical oversight in current defense planning is viewing drone workforce deficits in complete isolation. The defense industrial base is a largely closed ecosystem, drawing continuously from the same restricted pool of cleared, U.S. citizen labor. Consequently, the drone sector is engaged in direct, zero-sum competition with other vital national security priorities for the exact same blue-collar workers.⁵⁴

8.1 The Talent Tug-of-War

The American industrial base is currently strained by massive munitions consumption in Eastern Europe and the strategic imperative to expand the U.S. Navy fleet to maintain deterrence in the Indo-Pacific.⁵⁴ The scale of this consumption is staggering; at peak intensity, Ukraine’s daily need for 155mm artillery shells could exhaust pre-war U.S. monthly production in just over a day, while their consumption of 10,000 drones per month could deplete the entire U.S. inventory in a matter of weeks.⁵⁴

To address this, the U.S. government is actively modernizing and expanding its shipyards, armories, and munitions plants.⁵⁷ However, the production of artillery shells, the construction of Columbia-class nuclear submarines, and the mass manufacturing of attritable UAS all require the exact same core competencies: industrial electricians, master welders, QA inspectors, and CNC machinists.²⁰ When the DoD successfully injects capital to ramp up submarine shipbuilding or warm up munitions production lines, it inadvertently cannibalizes talent from aerospace and drone programs.⁵⁵ Regional labor markets, particularly in historical manufacturing hubs, cannot organically produce highly skilled tradespeople fast enough to satiate the concurrent, surging demands of all branches of the military.²⁰

8.2 Vocational Pipelines and Accelerated Training

Historical precedents demonstrate that national industrial mobilization requires viewing human capital as a strategic resource. During World War II, the iconic “Rosie the Riveter” campaign was not merely propaganda; it was a deliberate, government-led effort to solve a systemic labor crisis, successfully increasing the proportion of women in the U.S. aircraft industry workforce from 1 percent to 65 percent by 1943.⁵⁴ The current DIB faces a similar, albeit more technically complex, workforce crisis that requires comparable institutional focus.⁵⁴

To combat the talent shortage, the DoD has begun investing in accelerated vocational pipelines. The Accelerated Training in Defense Manufacturing (ATDM) pilot project in Danville, Virginia, funded by the DoD’s Industrial Base Analysis and Sustainment (IBAS) program, serves as a vital proof of concept.⁵⁸ Originally focused on addressing gaps in the submarine shipbuilding sector, the ATDM platform aims to compress traditional 1-to-2-year trade training programs into an intensive 4-month curriculum designed specifically to meet urgent defense maritime production requirements.⁵⁸

For the uncrewed systems industry to scale, similar regional training centers dedicated specifically to advanced composites, precision soldering, and digital drone fabrication must be established nationwide.²⁶ Educational institutions are beginning to recognize this shift. High school Career and Technical Education (CTE) programs and community colleges are integrating drone operation, maintenance, and composite fabrication into their curricula, utilizing on-campus makerspaces equipped with 3D printers, laser cutters, and CNC machines.²⁷ These programs introduce students to essential skills, from understanding electronic systems to diagnosing circuit faults and interpreting technical documentation.⁶⁰ However, the scale of these educational initiatives remains vastly inadequate relative to the projected military need for tens of thousands of units per month.²¹ Furthermore, the DoD’s Human Capital Operating Plan (HCOP) and the newly established Chief Talent Management Officer (CTMO) must ensure that talent acquisition strategies penetrate to the blue-collar, vocational level, rather than focusing solely on white-collar engineering and cyber defense roles.⁶¹

9. Strategic Imperatives for DoD Leadership

The tendency to fixate on the technological capabilities of autonomous systems—AI integration, swarm logic, and sensor fidelity—obscures the physical reality that drones are ultimately built by human hands in physical factories. To ensure the success of large-scale manufacturing initiatives like Replicator and maintain strategic deterrence, DoD leadership must address the following imperatives regarding human capital:

1. Elevate Human Capital to a Strategic Capability: As articulated by defense policy experts, the DoD must view investments in human capital with the same urgency and scale as investments in research and development, software architecture, or plant equipment.⁵⁸ The establishment of the CTMO is a positive institutional step, but execution must reach the blue-collar factory floor.⁶¹ The DIB cannot fulfill its mandates without a deliberate, national-level campaign to recruit, train, and retain skilled tradespeople.
2. Mitigate the Retention Crisis through Contractual Innovation: The DoD must aggressively address the alarming drop in production tenure. Leadership should explore contractual mechanisms that incentivize prime contractors to invest heavily in employee retention, long-term career pathing, and workplace stability. High turnover in defense facilities directly correlates to schedule delays and quality degradation, which are unacceptable under rapid-deployment mandates.³³
3. Modernize Quality Assurance Regimes for Attritable Mass: Applying exquisite-level FAR and DFARS quality assurance inspection requirements to expendable, attritable drones creates unnecessary labor bottlenecks. The DoD must rapidly establish bifurcated QA standards, allowing for “smart and affordable mass” to be inspected and accepted based on statistical sampling and functional reliability rather than the perfectionist, individual-unit scrutiny historically applied to multi-million-dollar crewed aircraft.³
4. Scale Accelerated Vocational Training Nationwide: The IBAS program’s successful investment in accelerated training models must be vastly expanded beyond shipbuilding to encompass aerospace composites, precision electronics assembly, and digital manufacturing. Establishing regional training hubs near planned hyperscale facilities—mirroring the ATDM model—will be essential to generating the localized, highly skilled talent pipelines required to build thousands of drones per month.²⁰
5. Address ITAR, Security Clearance, and Testing Frictions: To widen the talent pool and reduce facility overhead, the DoD should work with the State Department and security agencies to streamline clearance adjudications for essential blue-collar production roles. Furthermore, leadership must evaluate whether certain lower-tier components of attritable drones can be carved out of the most restrictive USML and CMMC requirements without compromising national security.³³ Concurrently, inter-agency coordination with the FAA and FCC is required to establish dedicated airspace and spectrum for the rapid testing of mass-produced UAS, closing the iterative feedback loop.⁵¹

The ultimate success of the United States’ strategy to counter adversarial mass in future conflicts will not be determined solely by the algorithms guiding its weapons, but by the physical capacity of its industrial workforce to build them. Securing the physical supply chain and the specialized labor force that drives it is the immediate, critical prerequisite for unleashing American drone dominance.

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Works cited

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1. Executive Summary

The United States Department of Defense is currently executing a historical pivot in military acquisition, transitioning from an exclusive reliance on exquisite, multi-million-dollar legacy platforms toward the mass deployment of attritable, autonomous Uncrewed Aerial Systems (UAS). Initiatives such as Replicator are designed to field thousands of autonomous systems across multiple warfighting domains within highly compressed timelines, fundamentally altering the calculus of modern deterrence.¹ However, the strategic dialogue surrounding this transition consistently fixates on high-level system attributes, prioritizing artificial intelligence integration, swarm autonomy, software architecture, and final airframe assembly. This top-down perspective has inadvertently obscured severe, systemic vulnerabilities rooted deep within the sub-tier supply chain.

A modern military uncrewed aerial system is not merely a software platform; it is a complex physical integration of advanced metallurgy, specialized chemical composites, and precision microelectronics. The ability to sustain the mass production of these kinetic systems relies entirely on the continuous, uninterrupted flow of foundational raw materials and lower-tier electronic components.³ Currently, the United States and its allied partners suffer from profound industrial base deficiencies across these fundamental material categories.³ The domestic drone industrial base remains highly fragmented, chronically constrained by supply chain bottlenecks, and alarmingly entangled with adversary-controlled manufacturing ecosystems.⁴

This strategic report provides an exhaustive analysis of the structural vulnerabilities inherent in the UAS supply chain. It details the profound reliance on foreign markets, predominantly the People’s Republic of China, for the critical minerals, rare-earth permanent magnets, high-performance micro-motors, and advanced printed circuit board substrates required to mass-produce defense drones.⁵ These dependencies do not merely represent minor procurement delays; they constitute single points of strategic failure. The disruption of precursor chemicals, specific magnet alloys, or base-level electronic components by an adversarial state has the proven potential to instantly halt the production of entire classes of defense systems.⁵

Mitigating these vulnerabilities requires an immediate and aggressive shift in strategic perspective from defense leadership. The location of final drone assembly is a demonstrably poor indicator of supply chain security or operational resilience.⁵ True industrial resilience requires deep sub-tier visibility, targeted capital interventions to correct systemic market incentive failures, and a coordinated, multilateral strategy to develop alternative processing and manufacturing nodes entirely outside of adversarial jurisdiction. Without securing these upstream chokepoints, the Department of Defense risks fielding a modern military force that can be grounded not by kinetic strikes, but by the stroke of an adversarial export control policy.

2. The Geostrategic Context of Attritable Mass

The modern battlefield is undergoing a profound transformation, characterized by the proliferation of inexpensive, highly capable uncrewed systems that actively degrade the utility of traditional, concentrated military assets. The United States defense strategy has recognized that matching adversarial forces, particularly the People’s Liberation Army, requires a radical increase in autonomous mass.¹

The Department of Defense launched the Replicator initiative under the direction of the Deputy Secretary of Defense, explicitly aiming to rapidly deploy multiple thousands of cost-effective drones across multiple domains within an aggressive eighteen to twenty-four-month timeframe.¹ This initiative serves as a critical test of the defense industrial base’s ability to bridge the persistent gap between developing an innovative concept and deploying a capability at a scale sufficient to alter geopolitical deterrence.² However, achieving this scale necessitates a departure from bespoke defense manufacturing toward commercial-scale industrial output, an area where the domestic base faces severe structural impediments.

The commercial drone manufacturing sector underwrites military capability through the sheer volume of production. Unprecedented manufacturing scale produces vital learning effects, enabling rapid technological adaptation, enhanced reliability, and dramatic cost reductions.⁴ The People’s Republic of China currently leverages a massive, globally dominant commercial drone ecosystem that feeds directly into its military and dual-use capabilities.⁴ This dominance was deliberately cultivated through state-sponsored industrial policies designed to turn the nation into a formidable peer competitor across all areas of leading-edge technology and manufacturing output.⁷ By contrast, the defense innovation ecosystem in the United States, while highly capable of designing advanced prototypes, lacks the foundational manufacturing capacity required to produce drones in large, attritable numbers without relying heavily on foreign sub-tier inputs.¹

The profound consequences of this industrial disparity are currently being demonstrated in the ongoing Russo-Ukrainian conflict. Driven by the brutal arithmetic of attrition warfare, the Ukrainian defense forces are scaling uncrewed mass to unprecedented levels, having manufactured roughly four million drones in a single year and pacing toward an output of seven million systems annually.⁸ To achieve this staggering volume, Ukraine did not execute a domestic manufacturing miracle; rather, the nation embraced a severe strategic compromise by overwhelmingly procuring Chinese drone components to fuel its assembly lines.⁸

This dynamic has created a dizzying geopolitical paradox that serves as a masterclass in the circular logic of compromised supply chains.⁸ Western capital, provided to defend sovereignty, is utilized to purchase critical components from Chinese manufacturers. These funds subsequently flow into the state-managed economy of an adversary that actively supports the opposing belligerent.⁸ This entanglement explicitly demonstrates that during a high-intensity conflict, volume and immediate availability will inevitably dictate procurement realities, overriding security protocols and geopolitical alliances if domestic supply chains remain incapable of meeting the exponential surge in demand.⁸

3. The Anatomy of Drone Material Dependencies

The architectural foundation of modern drone warfare is built upon a complex chemistry and metallurgy that is frequently overlooked by policymakers focused on software, autonomy, and ethical artificial intelligence frameworks.³ The material dependency of a modern military drone can be categorized into five distinct strategic vulnerabilities: structural materials, propulsion systems, power storage, semiconductor sensors, and the underlying logistics network.³ Each of these material categories reveals a critical weak link that exposes the broader defense industrial base to systemic risk.³

Structural materials form the kinetic skeleton of the uncrewed system. High-performance military drones rely extensively on Carbon Fiber Reinforced Polymers to provide the necessary strength-to-weight ratios required for extended flight profiles.⁵ The raw, high-strength carbon fibers utilized in these composites are spun from a highly specialized polyacrylonitrile precursor chemical, the production of which is globally limited.⁵ The industrial chokepoint for structural materials is fundamentally constrained by time; aerospace-grade carbon fiber capacity is restricted to a small number of firms operating specialized autoclave facilities, making it physically impossible to rapidly surge production during a sudden geopolitical crisis.⁵ Furthermore, structural integrity often necessitates the use of specialized metals, predominantly advanced aluminum-lithium alloys that provide greater fuel and munition margins, alongside specialized aerospace titanium utilized extensively in landing gear and critical fastener applications.⁵

The logistics and integration networks that bind these components together represent an equally severe vulnerability due to profound opacity.⁵ The Department of Defense historically lacks adequate visibility into the procurement networks operating below the prime-contractor tier.⁵ Because foundational subcomponents cross multiple international borders and regulatory jurisdictions before reaching final assembly, the loss of a single precursor chemical or a specific alloy can easily halt the production of an entire class of uncrewed systems.⁵ Without rigorous traceability, a final system branded as domestically produced offers a false sense of security if its fundamental components remain reliant on adversary-controlled refineries.³

4. Upstream Bottlenecks: Critical Minerals and Chemical Processing

The true foundation of the drone supply chain resides at the level of critical minerals and the highly specialized metallurgical processes required to refine them for electronic and kinetic applications. Over the past several decades, the United States and its primary allies have systematically shed capacity in domestic mining, mineral refining, and advanced material fabrication.³ Consequently, the defense industrial base has become deeply entangled with supply chains over which adversary states exercise near-absolute monopolies.³

The integration of advanced communications, precision electronics, and automated navigation systems depends entirely on a highly specific set of critical minerals, each possessing unique properties that ensure reliability under the extreme conditions of combat flight.¹⁰ The People’s Republic of China dominates the extraction and, more importantly, the midstream chemical processing of these elements.¹¹

The extreme concentration of battery material processing presents a particularly acute geographical risk. While raw lithium or natural graphite may be extracted in regions such as South America, Australia, or Africa, the chemical refining processes necessary to produce battery-grade anode and cathode materials remain heavily bottlenecked in East Asia.⁵ Even modest export controls or logistical disruptions affecting processed graphite can stall Western drone assembly lines within a matter of weeks, completely neutralizing domestic manufacturing capabilities.⁵ Market dynamics further complicate this vulnerability, as upstream metal demand is currently undergoing a rapid structural shift toward lithium-iron-phosphate battery chemistries, further cementing reliance on established Asian refining networks.⁵

5. The Micro-Motor and Propulsion Crisis

Propulsion systems represent one of the most immediate and glaring sub-tier vulnerabilities threatening the deployment of autonomous drone swarms. The standard propulsion mechanism for small-to-medium uncrewed systems is the brushless direct current micro-motor.⁸ While the physical construction of a brushless motor is not inherently complex—relying on basic electromagnetic principles—the capability to achieve high-volume mass production with extreme quality control rivals the highest tiers of automated commercial manufacturing.¹⁴

The performance, efficiency, and thrust capabilities of a defense-grade brushless motor are entirely dictated by the strength and thermal resilience of its permanent magnets.¹¹ These systems require specialized Neodymium-Iron-Boron magnets.¹⁴ To ensure these magnets do not demagnetize and fail under the extreme heat generated during continuous high-thrust combat maneuvers, they must be alloyed with heavy rare earth elements, specifically dysprosium or terbium.⁵ Each individual small drone motor contains between five and fifteen grams of these specialized magnetic alloys; scaling this requirement to equip millions of drones translates to a demand for metric tons of highly processed rare earth materials.⁵

The United States currently lacks a secure, commercial-scale domestic supply chain for the production of defense-grade permanent magnets.¹⁵ The People’s Republic of China acts as the near-absolute supplier of drone motors precisely because it controls approximately 90 to 95 percent of global rare earth processing, refining, and sintered magnet manufacturing.⁵

This disparity is the result of a long-running, catastrophic failure of domestic industrial policy.¹⁸ Prior to 1980, the United States led the world in rare earth production. However, a change in regulations by the Nuclear Regulatory Commission regarding the handling of thorium—a naturally occurring, mildly radioactive byproduct commonly found alongside heavy rare earths—inadvertently imposed massive cost liabilities on domestic extraction.¹⁸ To avoid the crippling costs of regulatory compliance, U.S. mining entities ceased processing rare earth byproducts, diverting these critical resources into mine tailings as buried waste.¹⁸ This regulatory shift effectively ushered in the wholesale transfer of the rare earth industry, including metallurgy, processing IP, and commercial applications, directly to China, which aggressively capitalized on the market vacuum.¹⁸

The Department of Defense must understand that mining raw rare earth ore does not equate to supply chain security. Hundreds of rare earth mining projects have been initiated outside of China, yet these efforts fail to address the true chokepoint.¹⁸ A one percent reliance on adversarial states for midstream processing equates to a one hundred percent reliance on those states for the final functional capability.¹⁶

The revitalization of domestic drone motor manufacturing is currently blocked by an acute market incentive failure. Private manufacturers operate within strict margin constraints, and the commercial demand for neodymium magnets is heavily skewed toward high-performance electric vehicle drivetrains and large-scale offshore wind turbines.⁸ These industrial sectors offer vastly superior profit margins compared to the production of small, attritable drone motors.⁸ Without immense upfront capital expenditure subsidies or guaranteed, long-term procurement contracts from the Department of Defense, domestic startups and legacy manufacturers possess no market motivation to prioritize defense drone propulsion systems.⁸

Consequently, the cost disparity between domestic and adversarial motor production has become insurmountable without intervention. Benefiting from state subsidies and a complete monopoly on raw materials, Chinese manufacturers have flooded the global market with high-quality brushless motors priced between $12 and $25 per unit.⁵ A functionally equivalent motor manufactured utilizing exclusively non-Chinese supply chains costs between $100 and $225 per unit.⁵ Equipping a standard quadcopter with U.S. propulsion systems therefore elevates the motor cost from a negligible $48 to over $400, fundamentally undermining the economic feasibility of the Replicator initiative’s attritable mass goals.⁵

The geopolitical risks of this dependency were recently laid bare when the United States Department of the Treasury was forced to sanction T-Motor, the world’s largest commercial drone motor manufacturer based in China, for actively supplying kinetic propulsion systems to Russia and Iran.⁵ While a small contingent of allied manufacturers exists—including Allient and ModalAI in the United States, Evolito in the United Kingdom, and Rotor Lab in Australia—these firms face significant hurdles in scaling production rapidly enough to replace the current dependency on adversarial suppliers without sustained government support.¹⁴

6. The Electronic Nervous System: Printed Circuit Boards and Substrates

Printed Circuit Boards function as the central nervous system of any uncrewed aerial system, meticulously routing power and digital data between flight controllers, high-draw sensors, and kinetic propulsion systems. The assumption that the domestic assembly of a final circuit board ensures operational security represents a critical misunderstanding of sub-tier material flows. The advanced laminate materials required to manufacture a defense-grade circuit board rely entirely on a fragile and heavily constrained global supply network.²²

The domestic printed circuit board industry is currently experiencing a severe capacity crisis driven by converging geopolitical and commercial pressures. The ongoing conflicts in the Middle East and Eastern Europe have led to a rapid depletion of advanced interceptors and long-range precision munitions.²³ As the Department of Defense surges production to replenish these critical stockpiles, domestic electronics suppliers are being overwhelmed with ITAR-restricted procurement requests.²³ Under the Defense Production Act, the government issues rated orders (DX or DO designations) that legally compel domestic suppliers to prioritize national defense contracts above all commercial work.²³ This dynamic is stretching domestic manufacturing output dangerously thin, resulting in extended lead times, significant cost inflation, and capacity bottlenecks for new UAS acquisition programs.²³

Simultaneously, the global electronics supply chain is undergoing an unprecedented structural transformation driven by the explosive proliferation of Artificial Intelligence infrastructure.²² The construction of AI data centers, massive GPU clusters, and high-bandwidth networking equipment requires massive quantities of the exact same ultra-low-loss, high-frequency printed circuit board laminates utilized in military drones, phased-array antennas, and advanced aerospace communications.²² What was once a niche requirement for the defense sector has become the defining demand driver for the global materials ecosystem.²² To capitalize on this high-margin commercial demand, major laminate manufacturers—including primary defense suppliers such as Rogers, Isola, and Taconic—are aggressively reallocating their production lines toward AI server board materials, creating a severe trickle-down shortage that threatens to paralyze the production of standard automotive, industrial, and defense electronics.²²

The vulnerabilities of high-frequency circuit boards extend deeply into the raw materials used to construct the laminates themselves. A finished high-frequency substrate is a complex composite of ultra-thin copper foils, specialized glass yarns, and highly stable dielectric resins.²⁷ Each of these sub-tier inputs suffers from distinct geographic and industrial concentration risks:

Without secured, uninterrupted access to imported precision copper foils and electronic-grade glass yarns, the domestic printed circuit board industry cannot fulfill surging defense orders. Pumping additional procurement capital into domestic final-assembly facilities will yield marginal returns if those facilities lack the raw material substrates required to fabricate the physical boards.

7. Semiconductors, Flight Controllers, and Electro-Optics

The active electronic components mounted to the circuit board—the microprocessors, power regulators, and precision sensors—constitute the intelligence and situational awareness of the uncrewed system. This domain remains heavily reliant on opaque, international semiconductor supply chains that introduce profound cybersecurity and operational availability risks.

The flight controller operates as the central brain of the drone.¹⁴ It houses the silicon microprocessors that execute autonomous navigation algorithms, alongside the Inertial Measurement Unit, a critical array of gyroscopes and accelerometers that calculate exact heading and velocity.¹⁴ The flight controller interfaces directly with the Electronic Speed Controller, a vital power management module that converts low-voltage digital signals from the processor into the high-amperage, three-phase alternating current required to drive the brushless motors at variable speeds.¹³

Modern Electronic Speed Controllers rely entirely on advanced power semiconductors, specifically Metal-Oxide-Semiconductor Field-Effect Transistors (MOSFETs) and gate driver integrated circuits.¹³ While elite Western semiconductor firms such as Infineon manufacture highly capable, defense-grade MOSFETs explicitly designed for high-power drone applications, the global commercial market remains flooded with cheaper alternatives fabricated in Chinese foundries.¹⁴ The primary vulnerability in this sector is silicon provenance.¹⁴ Due to the profound opacity of global semiconductor packaging and distribution networks, domestic circuit board assemblers frequently struggle to verify the true origin of their components. Recent industry surveys indicate that nearly half of United States circuit board manufacturers cannot definitively determine whether their assembled products contain microprocessors or discrete components manufactured within the People’s Republic of China.¹⁴

Sensors represent the sensory apparatus of the drone, and Chinese dominance in this sector is systematically embedded into the nation’s broader military doctrine.⁵ The People’s Liberation Army has officially prioritized a shift toward “intelligentized warfare,” a doctrine that leverages automation, artificial intelligence, and data-driven decision-making to secure battlefield dominance.⁵ Central to this doctrine is the mass integration of LiDAR (Light Detection and Ranging) technology, which generates highly precise, three-dimensional spatial data essential for autonomous navigation in environments where GPS signals are actively jammed or degraded.⁵

Recognizing LiDAR as a strategic chokepoint technology, Beijing aggressively subsidized its domestic industry.⁵ Today, Chinese firms—including Hesai, Livox, and RoboSense—control nearly eighty percent of the global LiDAR market.⁵ The integration of these low-cost, high-capability sensors into Western defense platforms presents severe espionage and data exploitation risks, as the hardware is explicitly designed to meticulously map physical surroundings.⁵

Initial legislative attempts to secure the United States drone fleet against these threats inadvertently created massive security loopholes. In 2020, when the government launched initiatives like the Blue UAS program to purge adversarial components, policymakers fixated almost exclusively on mitigating cybersecurity risks, focusing tightly on cameras, communication links, and data-transmitting microchips.⁵ Consequently, purely kinetic and mechanical components, such as brushless motors and speed controllers, were entirely excluded from the regulatory prohibitions.⁵ Because of this profound oversight, the overwhelming majority of uncrewed systems currently cleared for secure government operations continue to rely on kinetic subcomponents manufactured by the adversary.⁵

8. The Weaponization of the Supply Chain: Export Controls and Coercion

The deep integration of Chinese materials and subcomponents into the global defense architecture grants the People’s Republic of China immense, asymmetric geoeconomic leverage. Beijing has definitively transitioned from passively dominating market share to actively weaponizing its supply chain monopolies through the aggressive implementation of extraterritorial export controls.³

In recent years, the Chinese Ministry of Commerce (MOFCOM) has established a highly restrictive regulatory framework designed to safeguard its national security interests by tightly controlling the flow of defense-critical materials.⁵ This campaign began with stringent export licensing requirements on gallium, germanium, and specialized graphite.⁵ However, the most severe escalation occurred with the issuance of Ministry of Commerce Notice 2025 No. 61, which targeted rare earth elements and permanent magnet materials.⁵

This regulatory mechanism introduces sweeping extraterritorial oversight that directly impacts foreign manufacturers and multinational defense contractors.⁵ Under Notice 61, any foreign organization must obtain explicit authorization and an export permit from the Chinese government if they attempt to export items manufactured entirely outside of China that happen to contain even trace amounts of Chinese-origin rare earths.⁵ The legal threshold for requiring this permit is triggered if the value of the Chinese-origin rare earth content comprises a mere 0.1 percent or more of the total value of the final manufactured item.⁵ Furthermore, the regulations explicitly prohibit the approval of export applications destined for foreign military users or any end-use related to improving potential military capabilities.⁵

To enforce compliance, both domestic and foreign operators are mandated to provide a formal “Declaration of Compliance” that documents the precise percentage of Chinese-produced rare earth content to downstream recipients and end users.⁵ While the Ministry of Commerce temporarily suspended several of these specific export restrictions in late 2025—easing immediate logistical bottlenecks—the underlying legal framework remains fully intact and the suspensions are currently scheduled to expire in November 2026.⁵

This dynamic establishes a persistent, structural vulnerability for the United States defense sector. The Chinese government possesses the established legal and administrative mechanisms to instantly halt the global export of essential drone subcomponents without the need for formal diplomatic announcements or kinetic hostilities.⁵

Simultaneously, the United States’ own attempts to secure its supply chain through domestic legislation have inadvertently generated severe operational friction. The rigorous enforcement of the Uyghur Forced Labor Prevention Act has systematically disrupted the importation of commercial drones and underlying subcomponents.⁵ Because supply chains in East Asia are notoriously opaque, domestic manufacturers struggle to definitively prove that their sub-tier inputs are free from forced labor practices, leading to cascading delays in procurement.⁵ Furthermore, as federal agencies strictly prohibit the certification and utilization of foreign UAS component designs, domestic commercial and defense users are forced to transition to a domestic manufacturing base that simply does not yet possess the capacity to absorb the demand, further threatening the timeline of strategic defense initiatives.³⁹

9. Strategic Mitigation and Comprehensive Supply Chain Resilience

To successfully enable the warfighter and realize the strategic imperatives of initiatives like Replicator, Department of Defense leadership must fundamentally alter its procurement strategy. The traditional approach of optimizing for maximum cost efficiency at the prime-contractor level has actively driven the supply chain into the hands of strategic competitors.³ Efficiency made supply chains global; modern deterrence now requires redundancy to make them resilient.³

Achieving this resilience necessitates a comprehensive, multi-pronged industrial strategy focusing directly on sub-tier nodes:

1. Aggressive Expansion of Defense Production Act Authorities The Defense Production Act Title III must be aggressively transitioned from a tool for emergency wartime intervention into a mechanism for long-term, structural industrial planning.⁴⁰ The Department must utilize these authorities to forcefully correct the market incentive failures that currently paralyze domestic production.⁴² Financial support, direct purchase commitments, and early-stage risk mitigation instruments must be deployed to establish domestic rare earth smelting facilities, neodymium magnet sintering plants, and specialized foundries for high-frequency copper foils.⁴² By providing guaranteed, multi-year demand signals, the government can effectively de-risk the massive capital expenditures required for private industry to establish low-margin component manufacturing, such as drone propulsion systems.⁵

2. Institutionalizing Economic Corridors and Multilateral “Friendshoring” Total autarky—producing every component entirely within the borders of the United States—is mathematically and economically unfeasible. Therefore, the Department of Defense must closely align its supply chain strategy with broader geoeconomic initiatives aimed at stabilizing trade and reindustrializing allied nations.⁴⁴ The establishment of secure economic security zones, such as the Pax Silica initiative’s 1,620-hectare Luzon Economic Corridor in the Philippines, provides vital offshore capacity for semiconductor packaging and critical mineral diversification outside of Chinese jurisdiction.⁴⁵

Furthermore, the United States must rapidly deepen bilateral drone production alliances. Leveraging platforms like the U.S.-India Trade Policy Forum and the Quad Semiconductor Supply Chain Initiative will incentivize the migration of manufacturing nodes to emerging markets like India and Vietnam.⁴⁶ Advanced manufacturing allies, particularly South Korea and Japan, are already pivoting toward military UAS integration; recent agreements between major U.S. defense contractors and South Korean conglomerates like Hanwha Aerospace to co-produce advanced uncrewed systems demonstrate the immense potential of integrating foreign capital and expertise into the allied defense base.⁴⁸

3. Modernizing Strategic Stockpiles for Intermediate Materials The national strategy for maintaining strategic stockpiles must be urgently modernized to reflect the realities of advanced manufacturing. Historically, the United States has stockpiled raw, unrefined ores.¹⁷ This approach is operationally obsolete. In the event of a sudden conflict that severs Pacific supply lines, the United States cannot afford the years required to permit and construct the highly specialized foundries necessary to convert raw lithium or rare earth oxides into functional defense components. The Department must mandate the stockpiling of intermediate, heavily processed materials: pre-impregnated aerospace carbon fiber, sintered neodymium magnet blocks, semiconductor-grade gallium, and ultra-thin copper foils.³

4. Mandating Traceability and Engineering for Modularity The definition of “Made in America” must be strictly redefined to encompass sub-tier provenance. The Department of Defense must establish a comprehensive national database linking top-level acquisition programs directly to the geographic origin of their foundational materials.³ What cannot be traced cannot be protected.⁵ This deep visibility is the only reliable mechanism to enforce security protocols and prevent the integration of adversary-manufactured logic controllers and LiDAR systems.

Finally, acquisition frameworks must mandate modularity during the earliest stages of the engineering process. Uncrewed systems must be designed with open architectures that permit the rapid, seamless substitution of components.¹⁴ If a highly efficient, imported brushless motor becomes unavailable due to an export restriction, the airframe must be capable of immediately integrating a slightly heavier, domestically produced alternative without requiring a total redesign of the flight control software or the physical chassis.⁵⁰ Furthermore, sustained research and development funding must be directed toward advanced material science to fundamentally engineer away reliance on highly concentrated minerals, exploring alternative magnetic compounds and non-lithium energy storage solutions.

The deployment of autonomous mass is poised to define the future of global security. However, this strategic advantage cannot be realized if the industrial foundation required to build it remains entirely dependent on the adversaries it is designed to deter. Securing these upstream chokepoints is no longer an abstract matter of industrial policy; it is the fundamental prerequisite for sustained military readiness in the modern era.

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