As modern warfare continues to evolve in its complexity, the sheer quantity of weapons a country possesses is no longer the only decisive factor in an armed conflict. If, for example, a Taiwan crisis were to escalate into a protracted conflict, the central dilemma would be: Is the United States capable of replenishing its weapons and munitions at a pace adequate to sustain the war effort? Would the strategic gain China would obtain from invading Taiwan outweigh the operational costs of the invasion?

The average military planner is busy counting ships, aircraft and missile stockpiles, as well as calculating defense spending. But these figures illuminate only part of what a geopolitical and military power such as the United States needs in order to be combat-ready. Maintaining a sustained combat posture also depends heavily on the companies that produce munitions, components, spare parts and replacement equipment.

Understanding defense readiness requires looking beyond national military preparedness and keeping track of the production capabilities of industrial manufacturers. According to a CSIS assessment, China’s defense industrial base is built to operate under wartime conditions, while the U.S. base remains largely geared toward peacetime production. Being able to assess readiness at the manufacturer level and close any existing gaps will give the United States the strategic wartime advantage it seeks.

China considers wartime industrial readiness a strategic priority. China’s manufacturing scale could make the difference in a protracted conflict in the Asia-Pacific. A Taiwan contingency could include a blockade, sustained maritime operations, missile strikes and loitering munitions, as well as attacks on supporting infrastructure. In this scenario, the United States and its allied forces would need to sustain their aircraft fleets, replenish missile stockpiles, repair ships and maintain a logistics chain across a vast theater of operations. It is in this context that China’s shipbuilding capacity, and its ability to produce, maintain and repair military equipment at scale and in real time, pose a serious industrial challenge for Washington. In 2024, CSIS estimated China’s shipbuilding capacity at roughly 230 times that of the United States, with China acquiring specific high-end weapons systems at five to six times the U.S. rate.

In response to a potential conflict in the Indo-Pacific, in June 2025 the Department of War requested a 13 percent increase in the 2026 defense budget. This increase therefore signals a U.S. industrial-military outlook aimed at deterring China’s ambitions. The increase prioritizes not only the growth and strengthening of U.S. naval power, but also investment in other areas of defense, such as the production of higher-performance fighter jets; at the same time, an increase in stealth units capable of operating from existing aircraft carriers; in turn, initial investments in the “Golden Dome” for Taiwan, which points to increased air defense capability against enemy missiles and aircraft; and finally, investments focused on upgrading nuclear technology.

It is crucial that U.S. lawmakers understand that defense spending is only one part of the equation. The fact that a company holds a defense contract does not mean it has the capacity to accelerate delivery times. Optimizing production often requires new facilities, specialized tooling, skilled workers and an increase in raw-material suppliers. Financing alone does not guarantee a manufacturer’s ability to meet increased demand. A 2025 Government Accountability Office (GAO) report found that none of the seven major U.S. shipbuilders it examined was in a position to meet the U.S. Navy’s ship delivery targets at the time. Key issues cited included infrastructure and workforce constraints. The key takeaway here is that national budgets and procurement totals alone cannot reveal the delivery times or capacity constraints of individual defense companies.

New ways of evaluating the companies that drive U.S. military power are emerging. As a practical response to the existing gap in manufacturing measurement, DefenseWatch.org has introduced an index. It currently scores 27 companies on a scale of 0 to 100, offering a more structured way to evaluate and rank U.S.-based defense manufacturers. Prime contractors, as well as other companies, are weighted differently according to the index’s unique methodology. The score is calibrated based on quarterly datasets fed into the algorithm from the Federal Procurement Data System (FPDS), SEC filings and notices from the Committee on Foreign Investment in the United States (CFIUS).

Rather than analyzing the U.S. defense industrial base as a monolithic entity, the index provides a company-level framework that makes it easier to compare manufacturers’ wartime readiness. The index is not a definitive prediction of wartime performance, but rather a tool that helps structure comparisons and expose potential vulnerabilities in the defense manufacturing industry.

The ability to surge defense production matters as much as, or more than, existing output. In a Taiwan conflict scenario in which the U.S. fires the first military salvo, weapons could be expended faster than peacetime production schedules can replenish them. In this scenario, it is worth being able to identify which manufacturers have the right facilities, workforce and supply arrangements to increase production at any moment. The key metric to watch is not necessarily a company’s current manufacturing capacity, but how quickly it could respond to an extraordinary surge in demand, as well as the cost reductions in manufacturing new technologies; in other words, the use of loitering munitions reduces the operational costs of achieving military objectives and, at the same time, has transformed the modern battlefield, partially replacing the use of conventional weapons and platforms with higher acquisition costs.

CSIS wargames of the Taiwan Strait illustrate the magnitude of the challenge. Across nearly two dozen iterations, U.S. forces typically expended more than 5,000 long-range missiles in three weeks. Replenishment, however, operates on a very different timeline: CSIS reported that producing a Long-Range Anti-Ship Missile (LRASM) took nearly two years, while the U.S. budget for fiscal year 2023 proposed buying only 88. The figures measure different things—simulated consumption, production lead time and planned procurement—but together they expose the core problem: the U.S. industrial base is not prepared for a potential conflict with China. The Taiwan Strait wargames highlight that, in such a scenario, the U.S. military would likely expend critical weapons far faster than its industrial base can currently replace them.

Key components for helping assess a manufacturer’s viability during a conflict include “Investment Quality,” “Domestic Contribution” and “Adversary Exposure.” “Investment Quality” refers to the ability to assess how much of the capital flowing into a given company is actually used to resolve production bottlenecks and meet reliable delivery schedules. “Domestic Contribution” refers to the extent to which a manufacturer can rely on locally sourced components and labor to reduce dependence on foreign suppliers. This also includes exposure to international imports of components and raw materials, as well as dependence on foreign labor. In a scenario in which U.S. strategic readiness will depend on its ability to operate a self-sufficient industrial base, this may be a crucial metric to assess. “Adversary Exposure” refers to how exposed a manufacturer’s supply chains are to foreign inputs. These risks include partial or full ownership of a defense production entity by a foreign government, as well as international cyber vulnerabilities.

The Defense Watch index methodology takes all of these criteria into account, allowing decision-makers to categorically assess replenishment capacity by manufacturer or across manufacturers. Being able to evaluate a company on the basis of individual information pillars is crucial. Two manufacturers may look equally strong on paper, but in practice one may turn out to underperform in a wartime scenario because of one or more exposed vulnerabilities. Returning to a potential Taiwan crisis, index rankings of this kind can help improve policymakers’ decisions, thereby strengthening deterrence in the Indo-Pacific.

Image caption: Defensewatch.org defense contractor tracking index

At the government level, manufacturer readiness analysis can shed light on where additional industrial investment or supplier diversification deserves attention. Defense planners could leverage the data to examine whether multiple programs depend on the same manufacturer or limited industrial input. Meanwhile, allies such as Japan and Australia could benefit from a clearer understanding of the industrial dependencies and resilience of their defense supply chains.

Industrial readiness is a key component of military power. The key question to keep in mind is this: “If a Taiwan crisis escalated into sustained combat, would Washington know which manufacturers could keep delivering, and would it pinpoint where the industrial base might struggle?” Beyond that, weapons inventories, as well as defense budgets/contracts, are an important, though insufficient, metric to monitor. Being able to readily assess a manufacturer’s surge capacity, investment quality, domestic contribution and adversary exposure adds another lens for understanding the industrial resilience of defense manufacturing. Deterrence depends not only on the military capabilities available to the United States at the outset of a conflict, but on the industrial capacity to sustain them. Measuring that capacity before a crisis arises is a strategic necessity.

Luis Márquez is a lawyer who graduated from the Universidad de los Andes in Venezuela. He holds a diploma in Strategic Intelligence Management, with a specialisation in Open-Source Intelligence (OSINT), from the National Technological University of Argentina. He is currently studying Urban and Port Security at the same institution, further developing his expertise in intelligence, security analysis, and the protection of critical infrastructure.