yes, it is necessary, when you start the game, usually you create your ship or your industry with basic elements.
It would be so easy to click and choose an options to replace an elements with one of its superior version... but no, you have to empty it, remove it and then put the upgrade back in the same place, refill it and reconfigure it... just really laborious for nothing.
in many others games... right click "upgrade" and it's over (in our case it's obviously in condition of having already created the better version and that one be available in inventory or container).
it should already be in game ^^