Navigating risk and building resilience

In navigating geopolitical fragmentation and supply chain diversification, the winners will be those who can maintain strategic flexibility without sacrificing innovation or cost competitiveness.

Automotive

“Battery strategy will separate EV winners from the rest.”

Chris Liu, Senior Analyst, New Energy Vehicles

EV winners will be those that build resilience into their battery and supply strategies. Lithium iron phosphate (LFP) batteries now account for over 50% of global plug-in electric vehicle (PEV) battery installations, driven by their cost advantages and safety profile. At the same time, range-extended electric vehicles (REEVs) are shifting toward larger battery pack capacities (40–60 kWh) to reduce range anxiety.

Yet structural risks are rising. A global mismatch between surging demand for small-format cells and new capacity focused on large-format production is creating supply bottlenecks and price volatility. With the US market slowing and Europe squeezed by tariffs and low-cost imports, legacy OEMs pivoting to hybrids risk surrendering battery electric vehicle (BEV) leadership to faster-scaling competitors.

This research is taken from:

Displays

"China's display manufacturing dominance creates concentrated supply chain vulnerability as geopolitical developments reshape global panel sourcing strategies."

David Hsieh, Senior Research Director, Displays

The display industry faces an acute supply chain concentration risk, with the majority of global LCD and OLED capacity concentrated in Asia, particularly China and South Korea.

As geopolitical dynamics shift and tariffs disrupt traditional trade flows, display buyers across automotive, consumer electronics, and industrial applications must develop diversified sourcing strategies. Leading brands are increasingly evaluating secondary suppliers, exploring nearshoring opportunities, and building dual-supply chain capabilities to mitigate single-point-of-failure risks.

Omdia projects that 2026 will be a good growth year for display demand with the display area growing by 6% and revenues by 4%. The increased demand will be crucial for display supply chain management.

The challenge extends beyond panel sourcing to critical components, including display driver integrated circuits, optical films, and display glass, where Asian concentration creates cascading vulnerabilities. Organizations must balance cost optimization with supply security while navigating evolving trade policies and regional manufacturing incentives.

This research is taken from:

Display Long-Term Demand Forecast Tracker

Manufacturing Tech

"Resilience as the new baseline for global manufacturing."

Joanne Goh, Senior Research Manager, Manufacturing Technology

Global manufacturing enters 2026 with improving momentum, but the competitive baseline has shifted. Growth is now defined by the ability to manage disruption and supply chain risk while maintaining operational continuity.

Technology has become the foundation of industrial resilience. Software-defined automation, AI-enabled decision systems, and physical AI—including humanoid robotics, autonomous mobile platforms, and adaptive machine agents—expands from pilot deployments to operational integration. These systems anchor workforce augmentation, stabilize throughput, and enhance continuity during labor or supply disruptions.

Decentralized manufacturing networks gain strategic relevance, raising the importance of hub countries such as Mexico, Southeast Asia, India, and Eastern Europe. At the same time, competitive dynamics shift toward vendors that excel in localized service, rapid integration, cybersecurity readiness, resilient supply chain and ecosystem partnership rather than price alone. 2026 marks a structural pivot toward intelligent, distributed, and risk-aware production systems, with physical AI emerging as a defining capability for resilience at scale.

Further reading:

Trends to watch: Manufacturing Technology 2026

This research is taken from:

Physical Security

"Supply chain concentration in video surveillance cameras, access control hardware, and intrusion detection systems exposes infrastructure and commercial security deployments to geopolitical disruption as manufacturing remains heavily concentrated in Asia.”

Tommy Zhu, Principal Analyst, Physical Security

The physical security industry confronts unprecedented supply chain vulnerabilities as regulatory pressures and geopolitical developments reshape global manufacturing. Video surveillance cameras, access control systems, and intrusion detection equipment remain concentrated in Asian production hubs—particularly China, Taiwan, and South Korea.

Recent FCC regulations have escalated beyond simple sales bans. New October 28 rules now authorize prohibition of previously approved products from blacklisted manufacturers and restrictions on component integration from targeted suppliers. This regulatory shift forces immediate strategic decisions across critical infrastructure and commercial deployments.

Tariff pressures drive manufacturers toward Vietnam and Mexico production facilities, yet this 2–3-year transition period exposes organizations to supply continuity risks and quality control challenges. Core components, including semiconductors and processors, remain heavily dependent on Taiwan and mainland China capacity, creating fundamental vulnerabilities that manufacturing relocation cannot immediately resolve.

Organizations cannot afford reactive approaches. Supply chain concentration creates vulnerabilities extending far beyond equipment costs to operational continuity across global facility portfolios.

This research is taken from:

Video Surveillance and Analytics Spotlight Service

Semiconductors

"Supply chain sovereignty and independence will shape 2026 semiconductor investment."

Mark Watson, Senior Research Director, Semiconductors

Supply chain resilience will continue to fundamentally reshape semiconductor sovereignty and investment patterns in 2026, driven by significant and ongoing geopolitical risk.

The industry is navigating export control uncertainty, tariffs and licensing restrictions which are driving a transition from cost-optimized global supply chains to resilience-focused regional ecosystems. Geopolitical shifts are driving massive investments in domestic manufacturing capabilities, with governments and lead players investing hundreds of billions of dollars to secure future strategic sovereignty and market access.

While this shift toward supply chain resilience will increase costs and complexity, it's creating new investment and partnership opportunities in advanced technologies and regional manufacturing hubs.

As the semiconductor market is projected to exceed $775 billion in 2025 and reach nearly $900 billion in 2026, in an increasingly fragmented landscape, the focus is shifting to prioritizing supply chain security and technological independence over pure efficiency.

This research is taken from:

Smart Grid

"Decentralized energy systems, like virtual power plants (VPPs) and microgrids, localize power supply, reducing reliance on central points and enabling autonomous operation during severe weather or cyber disruptions."

Stephanie Wu, Senior Analyst, EV Charging and Smart Grid

The primary risk to grid resilience today is centralized fragility, where a single point of failure (physical or cyber) can cause widespread outages. This risk is driven by the shift from hierarchical, utility-centric control to a decentralized, federated energy management model.

This involves deploying sophisticated software platforms – virtual power plants (VPPs) and microgrids – that manage aggregated distributed energy resources (DERs) like solar and battery storage.

When a disruption occurs, these local systems can automatically “island” themselves (disconnect from the main grid) and continue to power critical loads, establishing a self-healing architecture.

This operational change is essential for energy security, allowing utilities and energy managers to minimize downtime, ensure service continuity for essential infrastructure, and manage localized power quality, effectively transforming large, fragile grids into a resilient “network of networks.”

This research is taken from: