How is fusion energy and its supply chain doing?

One of the things that The Fusion Report has tracked as a publication is the fusion energy supply chain. As we talked about in our last article, fusion energy is a “system-focused” energy source – one which utilizes complex technology and very cheap and plentiful fuel (in this case, hydrogen) to produce electricity. And like most “system-focused” energy sources, fusion energy’s supply chain is fairly complex.

In fact the Fusion Industry Association (FIA) recently released “The Fusion Industry Supply Chain 2025” report (you can download it here). Every company in the fusion industry has at least one supply chain area that they have either short-term or long-term concerns about. While we are not going to provide a comprehensive summary of the report, some of the highlights include:

Positives:

• Fusion energy companies spent over $434M in 2024 on the supply chain, nearly doubling their spending levels in 2023.
• 86% of fusion suppliers saw their fusion-related business increase, and spent over $230M in new capacity to support fusion energy.
• 29% of the fusion industry suppliers currently have revenues over $500M per year.

Negatives:

• 83% of fusion suppliers see risks associated with selling to the fusion industry.
• Building a skilled workforce is one of the biggest concerns for fusion companies.
• China will likely pass U.S. companies in total public and private investments in 2025.

Overall, the picture for western fusion companies and their supply chain is very positive, but success requires greater risk-sharing across everyone in the fusion energy ecosystem. Fusion companies, suppliers, governments, universities, and major industrial players all have a role to play in getting fusion energy to commercial success.

Interview with Andrew Holland, CEO of the FIA

1. Please provide an update on the expansion of the FIA team, and where you see the FIA assisting in the development of the fusion energy industry today? The FIA today is expanding its membership. We currently have 43 members and almost 100 affiliates. We have also hired a director of public policy for U.S.; our U.S. team now has 4 people, plus 1 person in the UK and 1 in Brussels. The FIA also has a partnership with J-Fusion group in Japan, with 3 FIA full members in Japan and a number of affiliates).
2. The 2025 Fusion Industry report highlights the continuing interest in the energy source in funding and development of plants with utilities, tech giants and governments. What are the next steps for commercialization? There is definitely an interest in fusion with utilities, and they are participating in FIA events (and vice versa). However, they are not quite yet to the point of writing checks. On the technology side, there are a number of companies operating hyperscale data centers that are more active in fusion energy. For instance, Microsoft and Google participate in FIA, and have partnered with some of the fusion companies. It will be interesting to see when some of the datacenter development companies get involved.
3. What do you see as the biggest challenge from a supply chain standpoint for fusion? The supply chain is very “chicken and egg”; the concern is whether the supply chain can move fast enough, and invest the money required to get fusion online in the next ten years. “Onesies” is easier, scaling will be the harder part. Luckily, the solution is money (and investment). In general, FIA associate members are investing faster than non-FIA associate companies. Also, will the supply chains create issues with adversarial materials availability, etc. The most specialized ones (thermal blankets, fuels, gyrotrons) are less of a worry; the biggest worries are where there are existing markets that are severely dominated by the Chinese (power electronics specifically).
4. China continues to invest in fusion energy, while U.S. government investment has shrunk. The FIA proposed a bold set of initiatives for the U.S. government; how are these requests playing out with the current budgeting and policy process?
   China is creating “national champions” (either government-owned or government sponsored startups), which makes for a very uneven playing field. What would help is the return of industrial policies. Fortunately, these could be done for significantly less than the $54B that was invested under the CHIPS Act.
5. Secretary Wright is an advocate for fusion energy; what would you say to him if you had a few moments to discuss fusion energy? I would say, “fusion is real and coming soon. If you want it to be U.S.-led, we have to invest in infrastructure to make it happen. This includes investments in national labs, and private/public partnerships, and it can be burden-shared. Also, the U.S. government’s position today is unknown and uncertain. While it seems friendly, fusion funding has been cut by 6%, which is better than some other energy programs, but clearly not as good as China.
6. What have been the 2-3 most significant fusion industry developments that you have seen so far this year? On the science side, we continue to see gains (like NIF’s recent ones) in both the private and public sector (like TAE’s ability to contain high temperatures). We are also seeing deals being signed for “production” solutions, which help increase fusion energy’s believability. And more governments are paying attention to fusion; Germany and Japan are good examples of this. Even Chinese fusion progress (both funding and scientific-side breakthroughs) is good. The regulatory situation worldwide also continues to improve. Finally, fusion energy’s timelines to commercialization are just as good (if not better) than alternatives like SMRs. Nuclear fission still has a LOT of difficulties to overcome.
7. Why should private investors continue to put money into fusion? There comes a time in every emerging industry where you can make an unleveraged investment in all aspects of it. This significantly reduces the risks of specific investments. In the future, this will not be possible, and will result in retail returns.

Thanks again to Andrew Holland of the FIA for this interview, and we look forward to reporting on the progress of fusion energy in the future.