Hey There 3dPhil,
As far as I understand it this is a limitation of shader model 3 not Unreal Engine. Each component has it’s own material, but in SM3 a material can only sample 16 textures (and in UDK 2 of those were reserved for lightmaps).
You could get around it in UDK by using a thing called a texture atlas, but it required a custom node in the material that used a bit of HLSL that apparently is not available in UE4 yet.
While we’re on that topic… flutters eyelids at epic any chance that will be back on the menu any time soon?
Ambershee, feel free to chime in and add your support 