Trend Production bases are diversifying and supply chains are forming regional blocs

Summary

KIET expects the diversification of regional production bases and the formation of supply-chain blocs to accelerate in 2026. Continued investment in AI and green transitions and ongoing supply-chain restructuring form the backdrop, while US-China conflict, stronger protectionism and Middle East geopolitical risk speed the shift. In steel, capacity additions in India, Southeast Asia and the Middle East raise global overcapacity pressure, while the US and EU cut import reliance through protection and domestic output. Textile supply chains move away from China toward Southeast Asia and Latin America through diversification and nearshoring. In biohealth, supply-chain security policies, reshoring and friend-shoring led by the US and EU spread, while China tightens control over its own biopharmaceutical production. In shipbuilding, China-centred capacity keeps growing on large order backlogs, while Korea's cooperation with the US and India and new Southeast Asian bases promise only limited short-term gains.