Where exactly in the Tournament Rule FAQ does it state that if you have the same upgrade on 2 different ships you need 2 copies of it? I must be overlooking it or did they take that out?

FAQ v.2.2.3
Page 1

Ship, base, and card proxies are not allowed. Asteroids and other obstacles
may not be modified in any way. Custom “setup” templates designed to aid
players in ship deployment are not allowed. However, players may use their
range rulers and maneuver templates to help them set up formations during
deployment.

I think page 2 of the Tournament Rules under the heading of Squad Building might be more relevant.

Each player must submit his squad composition, including all associated Upgrade cards and total squad points, to the TO before the start of the tournament.

Thank you. We are running into players bringing in lists with 1 actual copy of an upgrade card, but using it on multiple ships. I knew that you had to have a copy of the upgrade card for each ship just couldn't remember where it said it.

The key is that upgrades belong to certain ships so each of those ships will need its own upgrade card.

An issue with using one card and saying it covers multiple ships is what happens if something gets rid of that upgrade. I could point to ordnance but a better example could be the Stealth Device. If a player has one copy but wants to say the upgrade is being used by 3 ships what happens when one of those ships is 'hit' and you discard the upgrade? Do you now have to magically find a way to keep track of what ship has, or doesn't have, the upgrade or should you discard it for everyone.

That's what borrowing is for (if people have spares and are willing).