# Concentration Monitor ## One of 14 tracked chokepoints has no substitute 02,5005,0007,50010,00012,500Herfindahl → compositeEUV Lithography Systems · Herfindahl 10,000 · substitutes 0% · demand growth 15% · composite 11,500 · stableEUV Lithography Systems11,500ABF Substrates (Ajinomoto Build-up Film) · Herfindahl 9,050 · substitutes 5% · demand growth 20% · composite 10,317 · resolvingABF Substrates (Ajinomoto Build-up Film)10,317Gallium & Germanium (Compound Semiconductors) · Herfindahl 9,802 · substitutes 10% · demand growth 15% · composite 10,145 · worseningGallium & Germanium (Compound Semiconductors)10,145worseningEML Laser Chips (800G+ Optical Interconnect) · Herfindahl 4,150 · substitutes 15% · demand growth 160% · composite 9,172 · worseningEML Laser Chips (800G+ Optical Interconnect)9,172worseningHigh Bandwidth Memory (HBM) · Herfindahl 4,174 · substitutes 5% · demand growth 55% · composite 6,146 · stableHigh Bandwidth Memory (HBM)6,146Advanced 2.5D Packaging (CoWoS-class) · Herfindahl 4,658 · substitutes 15% · demand growth 40% · composite 5,543 · resolvingAdvanced 2.5D Packaging (CoWoS-class)5,543Chiplet Interconnects (UCIe) · Herfindahl 3,750 · substitutes 10% · demand growth 50% · composite 5,063 · worseningChiplet Interconnects (UCIe)5,063worseningWafer Inspection & Metrology Equipment · Herfindahl 4,038 · substitutes 10% · demand growth 15% · composite 4,179 · worseningWafer Inspection & Metrology Equipment4,179worseningSemiconductor-Grade Neon Gas · Herfindahl 3,794 · substitutes 15% · demand growth 10% · composite 3,547 · stableSemiconductor-Grade Neon Gas3,547US Data Center Grid Interconnection · Herfindahl 2,850 · substitutes 20% · demand growth 35% · composite 3,078 · worseningUS Data Center Grid Interconnection3,078worseningEDA Tools (Advanced Node) · Herfindahl 2,696 · substitutes 5% · demand growth 12% · composite 2,869 · stableEDA Tools (Advanced Node)2,869EUV Photomasks & Pellicles · Herfindahl 2,250 · substitutes 5% · demand growth 20% · composite 2,565 · worseningEUV Photomasks & Pellicles2,565worseningPhotoresist (EUV-grade) · Herfindahl 2,114 · substitutes 10% · demand growth 18% · composite 2,245 · stablePhotoresist (EUV-grade)2,245Silicon Wafers (300mm) · Herfindahl 2,058 · substitutes 20% · demand growth 8% · composite 1,778 · stableSilicon Wafers (300mm)1,778 Herfindahl after the substitute deductionthe demand-growth extensionthe raw Herfindahl, before either operation _The ordering composite, decomposed._ One bar per tracked chokepoint. Each bar’s total length is the composite this page orders by, and the two spans are the two operations that built it: the solid span is the layer’s Herfindahl after the substitute deduction, and the outline extends it by the demand-growth multiplier. The caret marks the raw Herfindahl before either operation, so where it falls inside the outline, demand growth more than replaced what substitutes deducted; where it falls past the bar’s end, the substitute deduction won and the composite is smaller than the raw Herfindahl. On the single row with no substitute at any price, the solid span is the full Herfindahl and the outline is pure demand growth. The top bar reproduces from its own operands: **EUV Lithography Systems** at a raw Herfindahl of ~10,000 — view full provenance, 0% substitute availability and 15% annual demand growth, composing to 11,500. The composite is an editorial ordering device and its own provenance record says so: every row is flagged estimated, the estimation method is recorded as editorial, and no part of it is a measured severity. It is drawn this way so a reader can reproduce the published number from the published operands. ### The ordering under each construction The same 14 chokepoints ranked four ways: by Herfindahl alone, by each single editorial term applied to it, and by the published composite. **4** of 14 keep the same position under all four constructions; those rankings are robust to the editorial layer. The largest mover is **EML Laser Chips (800G+ Optical Interconnect)**, which shifts 3 places across the constructions; its position is the editorial judgment. Chokepoint HHI alone HHI × (1 − substitutes) HHI × (1 + growth) Published composite Spread EUV Lithography Systems 1 1 1 1 **0** ABF Substrates (Ajinomoto Build-up Film) 3 3 3 2 1 Gallium & Germanium (Compound Semiconductors) 2 2 2 3 1 EML Laser Chips (800G+ Optical Interconnect) 6 7 4 4 3 High Bandwidth Memory (HBM) 5 4 6 5 2 Advanced 2.5D Packaging (CoWoS-class) 4 5 5 6 2 Chiplet Interconnects (UCIe) 9 8 7 7 2 Wafer Inspection & Metrology Equipment 7 6 8 8 2 Semiconductor-Grade Neon Gas 8 9 9 9 1 US Data Center Grid Interconnection 10 11 10 10 1 EDA Tools (Advanced Node) 11 10 11 11 1 EUV Photomasks & Pellicles 12 12 12 12 **0** Photoresist (EUV-grade) 13 13 13 13 **0** Silicon Wafers (300mm) 14 14 14 14 **0** ReadingRank 1 is the highest score under that construction; tied scores share a rank. A spread of 0 means the chokepoint’s position owes nothing to the hand-assigned substitute and growth terms; a large spread means the position _is_ the editorial judgment. The published composite column reproduces the ordering of the plate above by construction. 14 points where AI chip supply structurally narrows. 6 are concentrating, 6 stable and 2 diversifying. Trajectory reports Herfindahl movement without a verdict: a point diversifying away from a near-monopoly narrows export-control leverage for whoever held that lever and widens resilience for buyers downstream. Each Herfindahl here is a single-market figure. The stress index below reports a portfolio-weighted Herfindahl across 93 CSET steps, and [Chokepoints](/supply-chain/chokepoints) reports per-layer figures; the three measure different markets and are not comparable. Cite CSVJSONJSON+Prov PrintScreenshot ## Current Chokepoints by Editorial Priority 14 nodes · ordered by editorial composite AI-compute supply chokepoints in an editorial priority ordering derived from HHI concentration, hand-assigned substitute availability, and demand growth, with trajectory. Governance leverage scores per-chokepoint policy-instrument reach for export-control coordination. Technology Category Top Supplier HHI Substitutes Demand Growth Trajectory Priority (editorial) Gov. Leverage [EUV Lithography Systems](#detail-euv-lithography) Lithography ASML (Netherlands) ~10,000 — view full provenance 0% 15% Stable ~11,500 — view full provenance 100 NL/EUUSJP [ABF Substrates (Ajinomoto Build-up Film)](#detail-abf-substrates) Substrates Ajinomoto (Japan) ~9,050 — view full provenance 5% 20% Deconcentrating ~10,317 — view full provenance 54 JP [Gallium & Germanium (Compound Semiconductors)](#detail-gallium-germanium) Materials China (aggregated producers) (China) ~9,802 — view full provenance 10% 15% Concentrating ~10,145 — view full provenance 0 [EML Laser Chips (800G+ Optical Interconnect)](#detail-inp-eml-lasers) Optics Lumentum (United States) ~4,150 — view full provenance 15% 160% Concentrating ~9,172 — view full provenance 49 US [High Bandwidth Memory (HBM)](#detail-hbm-memory) Memory SK Hynix (South Korea) ~4,174 — view full provenance 5% 55% Stable ~6,146 — view full provenance 82 US [Advanced 2.5D Packaging (CoWoS-class)](#detail-cowos-packaging) Packaging TSMC (Taiwan) ~4,658 — view full provenance 15% 40% Deconcentrating ~5,543 — view full provenance 57 US [Chiplet Interconnects (UCIe)](#detail-chiplet-interconnects) Packaging TSMC (CoWoS/InFO) (Taiwan) ~3,750 — view full provenance 10% 50% Concentrating ~5,063 — view full provenance 49 US [Wafer Inspection & Metrology Equipment](#detail-wafer-inspection-metrology) Equipment KLA Corporation (United States) ~4,038 — view full provenance 10% 15% Concentrating ~4,179 — view full provenance 92 USNL/EUJP [Semiconductor-Grade Neon Gas](#detail-neon-gas) Materials Ukraine (Ingas, Cryoin) (Ukraine) ~3,794 — view full provenance 15% 10% Stable ~3,547 — view full provenance 6 [US Data Center Grid Interconnection](#detail-power-grid-interconnection) Infrastructure PJM Interconnection (United States) ~2,850 — view full provenance 20% 35% Concentrating ~3,078 — view full provenance 57 US [EDA Tools (Advanced Node)](#detail-eda-tools) EDA Synopsys (United States) ~2,696 — view full provenance 5% 12% Stable ~2,869 — view full provenance 96 USNL/EUJP [EUV Photomasks & Pellicles](#detail-euv-photomask-pellicle) Materials Toppan (Japan) ~2,250 — view full provenance 5% 20% Concentrating ~2,565 — view full provenance 58 JPUS [Photoresist (EUV-grade)](#detail-photoresist-chemicals) Materials JSR Corporation (Japan) ~2,114 — view full provenance 10% 18% Stable ~2,245 — view full provenance 55 JP [Silicon Wafers (300mm)](#detail-silicon-wafers) Materials Shin-Etsu Chemical (Japan) ~2,058 — view full provenance 20% 8% Stable ~1,778 — view full provenance 67 JPUSNL/EU HHI runs 0 (perfect competition) to 10,000 (monopoly), computed from Tier-3 market-share estimates. The Priority column is the editorial composite the plate above decomposes; it orders the rows, and no measured severity enters it. **4** of 14 rows exceed the 7,000 critical threshold; **4** of 14 reach 80 or above on governance leverage, where a score of 80 or more means an existing allied jurisdiction already covers most leverage points. Trajectory reports the direction HHI is moving. Whether that movement is good news depends on the lens the reader brings, so this column gives no verdict. ### Upstream chip flow Related research Cited [The four largest AI chip designers consumed over 90% of CoWoS and HBM in 2025](https://epoch.ai/data-insights/ai-chip-supply-chain-constraints) Venkat Somala · Epoch AI · published March 12, 2026 · Scrutica accessed May 19, 2026 · CC-BY 4.0 NVIDIA, Google, AMD, and Amazon between them consumed >90% of global CoWoS packaging capacity and HBM supply (by value) in 2025, against ~12% of advanced-logic-die production: the concentration falls on the downstream-allocation side of the chain. Scrutica's monitor carries that snapshot forward with HHI scoring, governance-leverage decomposition across 14 nodes, and trajectory tracking, so the time-series question (concentrating or diversifying?) is answerable from the same surface. ## 18-Month Outlook 14 cards · trajectory evidence, supplier shares, governance surface, monitoring signal EUV Lithography SystemsCritical (11,500)Resolution: No clear path Stable ### Trajectory Assessment No competitor has demonstrated EUV capability; ASML order backlog stands at €38.8B (year-end 2025) with €7.4B EUV bookings; SK Hynix committing $8B for ~30 EUV systems through December 2027 (Samsung 20 systems for Pyeongtaek P5, ~$4B). High-NA EUV (0.55 NA) shipping to Intel and TSMC. ### Supplier Concentration (HHI: 10,000) 100%ASMLNetherlands ### Policy Implication The Netherlands holds the sole node for sub-5nm fabrication globally; Dutch export-licensing decisions (operating through the Wassenaar Arrangement) determine which countries can manufacture frontier chips. ### Governance Surface Allied Production Share100% Regime Jurisdiction Netherlands / EUUnited StatesJapan Active restrictions via NL/EU, US, JP 100 High 100% of this chokepoint's supply originates in countries with full or allied compute access. Technology-specific export controls are in force (penetrability: very difficult to circumvent). Demand Growth 15% YoY Substitute Availability 0% Resolution Timeline No clear path Source: ASML Q1 2026 6-K filing (FY2026 Form 6-K SEC EDGAR; €8.8B Q1 net sales; 2026 net sales guidance €36-40B); TSMC Q1 2026 earnings call Monitor: ASML quarterly earnings: order backlog by geography and system type (EUV vs. High-NA EUV) Assessed: 2026-05-19 ABF Substrates (Ajinomoto Build-up Film)Critical (10,317)Resolution: 2027-2030 (glass substrates ramping — Intel commercial product Q1 2026) Deconcentrating ### Trajectory Assessment Ajinomoto investing ¥25B for 50% capacity expansion by 2030; in early 2026 Ajinomoto announced a ¥1.2B land purchase in Gifu Prefecture for a new factory (construction 2028, operations 2032). Intel launched the first commercial glass core product in early 2026 — a meaningful resolution-path advance vs the prior 2028-2030 estimate, though high-volume glass-substrate qualification for frontier AI accelerators still trails ABF by years. Morgan Stanley projects 42% ABF supply-demand gap by 2028; Ajinomoto AI-driven ABF margins exceed 50%. ### Supplier Concentration (HHI: 9,050) 5% of this market is a residual bucket, squared here as one supplier. HHI is an upper bound by however much that bucket is itself fragmented. 95%AjinomotoJapan 5%Others (Sekisui, etc.)Various ### Policy Implication A single Japanese company supplies the dielectric film for every advanced AI chip package; no US or European producer exists at any scale. Glass substrates are the eventual escape path, but the timeline is 2028 at the earliest. ### Governance Surface Allied Production Share95% Regime Jurisdiction Japan No technology-specific restrictions tracked 54 Moderate 95% of this chokepoint's supply originates in countries with full or allied compute access. No technology-specific export controls currently apply, though allied production share provides latent policy optionality. Demand Growth 20% YoY Substitute Availability 5% Resolution Timeline 2027-2030 (glass substrates ramping — Intel commercial product Q1 2026) Source: ABF ~95% share = Nikkei / TrendForce estimate (Q3 2025 + May 2026 ABF margin note), not a primary disclosure — the Ajinomoto Annual Report 2025 publishes capacity/expansion but no share %; Morgan Stanley 2026 substrate supply outlook; Intel Q1 2026 glass core product launch Monitor: Ajinomoto annual report: ABF capacity utilization and expansion status; Intel/Absolics glass substrate pilot progress Assessed: 2026-05-19 Gallium & Germanium (Compound Semiconductors)Critical (10,145)Resolution: November 27, 2026 (deadline-driven) Concentrating ### Trajectory Assessment China export suspension expires November 27, 2026 (a known, calendared deadline). USGS Mineral Commodity Summaries 2026 (the latest periodical) puts China at 99% of primary low-purity gallium production in 2024 and 2025 and confirms China as the leading global producer/exporter of germanium metal in 2025. The military-end-user export ban remains in effect; only the broader prohibition was suspended. USGS modeled GDP impact: complete restriction of China gallium net exports could cut US GDP by $3.1B (range $1.7B-$8.2B); germanium $0.4B (range $0.01B-$1.1B); combined $3.4B (range $1.7B-$9.0B). Non-renewal of the suspension removes the primary global source of gallium (GaN power electronics, GaAs optical components) and germanium (fiber optics, IR optics) from the market. ### Supplier Concentration (HHI: 9,802) 1% of this market is a residual bucket, squared here as one supplier. HHI is an upper bound by however much that bucket is itself fragmented. 99%China (aggregated producers)China 1%Rest of worldVarious ### Policy Implication The November 2026 deadline is a binary event sitting inside the broader US-China trade-framework renegotiation, and it falls in the same window as the rare-earth deadline — one negotiation, several levers, all on the same calendar. Risk profiles diverge: gallium (99% China) is a near-monopoly; germanium (~68% China) has more non-Chinese supply but no rapid scale-up path. ### Governance Surface Allied Production Share0% Regime Jurisdiction No tracked regime has jurisdiction over major suppliers No technology-specific restrictions tracked 0 Minimal No significant supply originates in allied countries. Export control regimes have minimal direct leverage. Demand Growth 15% YoY Substitute Availability 10% Resolution Timeline November 27, 2026 (deadline-driven) Source: USGS Mineral Commodity Summaries 2026 (gallium: 99% Chinese production 2024-2025; germanium: China leading producer); MOFCOM Announcement No. 72/2025; USGS Open-File Report 2024-1057 (GDP-impact modeling) Monitor: MOFCOM announcements on Announcement 72/2025 renewal; US-China trade framework negotiations Assessed: 2026-05-19 EML Laser Chips (800G+ Optical Interconnect)Critical (9,172)Resolution: 2027-2029 (Lumentum 1.6T ramp + Coherent capacity expansion; McKinsey gap-closure trajectory) Concentrating ### Trajectory Assessment 800G+ transceiver demand growing 2.6x YoY (24M units 2025 to ~63M 2026). McKinsey June 2025 projects 800G shortfalls 40-60% through 2027 and 1.6T shortfalls 30-40% through 2029. Lumentum holds 50-60% of global EML chip production; demand exceeds Lumentum supply by 25-30%. March 2026 — Lumentum debuted 1.6T DR4 OSFP pluggable transceivers using its 200G/lane EML technology (the binding-constraint chip generation), confirming module-side roadmap but not loosening the chip-fab bottleneck. NVIDIA pre-allocation of supplier capacity persists. Silicon photonics is a substitute on the horizon but needs a different packaging stack. Shares here are chip-level (the binding constraint), not module-level. ### Supplier Concentration (HHI: 4,150) 15% of this market is a residual bucket, squared here as one supplier. HHI is an upper bound by however much that bucket is itself fragmented. 55%LumentumUnited States 30%Coherent (incl. Source Photonics)United States 15%OthersVarious ### Policy Implication Optical interconnect capacity is a binding constraint on AI cluster scale-out that GPU procurement timelines do not surface. A facility with GPUs and insufficient 800G+ transceivers runs at degraded throughput, no matter what the rack diagrams say. Lumentum holds ~55% of EML laser-chip production (the transceiver-internal component that cannot be substituted at the module level); US companies hold ~85% of EML chip production between them, but 2.6x YoY demand growth outruns every announced capacity expansion. ### Governance Surface Allied Production Share85% Regime Jurisdiction United States No technology-specific restrictions tracked 49 Limited 85% of this chokepoint's supply originates in countries with full or allied compute access. No technology-specific export controls currently apply, though allied production share provides latent policy optionality. Demand Growth 160% YoY Substitute Availability 15% Resolution Timeline 2027-2029 (Lumentum 1.6T ramp + Coherent capacity expansion; McKinsey gap-closure trajectory) Source: 650 Group / LightCounting Q3 2025; TrendForce optical transceiver forecast Q4 2025; Lumentum FY2025 10-K + Q1 2026 10-Q; McKinsey June 2025 optical transceiver supply analysis; Lumentum March 2026 1.6T DR4 OSFP launch announcement Monitor: 650 Group/LightCounting quarterly transceiver market reports; Lumentum/Coherent EML laser chip capacity announcements Assessed: 2026-05-19 High Bandwidth Memory (HBM)Elevated (6,146)Resolution: No clear path for geographic diversification Stable ### Trajectory Assessment Samsung recovered from ~15% (Q2 2025) to ~22% (Q3 2025) after HBM3E qualification with NVIDIA. SK Hynix’s lead narrowed slightly from its Q2 baseline to ~57% but retains clear market leadership. Cross-qualification achieved (Samsung/Micron both NVIDIA-qualified for HBM3E), but ~79% production remains in South Korea. ### Supplier Concentration (HHI: 4,174) 57%SK HynixSouth Korea 22%SamsungSouth Korea 21%MicronUnited States ### Policy Implication South Korea holds ~79% of HBM production (SK Hynix + Samsung). A peninsula-wide disruption — grid failure, seismic event, geopolitical break — would erase the majority of AI-accelerator memory supply. Micron (US, ~21%) is the only non-Korean producer, and no allied coordination mechanism exists for crisis-time HBM allocation. ### Governance Surface Allied Production Share100% Regime Jurisdiction United States Active restrictions via US 82 High 100% of this chokepoint's supply originates in countries with full or allied compute access. Technology-specific export controls are in force (penetrability: very difficult to circumvent). Demand Growth 55% YoY Substitute Availability 5% Resolution Timeline No clear path for geographic diversification Source: Counterpoint Research Q3 2025 memory market tracking; TrendForce HBM forecast Q4 2025 Monitor: SK Hynix quarterly earnings: HBM revenue mix and capacity utilization; TrendForce/Omdia HBM share updates Assessed: 2026-05-15 Advanced 2.5D Packaging (CoWoS-class)Elevated (5,543)Resolution: 2027-2028 Deconcentrating ### Trajectory Assessment TSMC scaling CoWoS from 75-80K to 120-130K wafers/month by end-2026 across Taiwan facilities (Chiayi AP7 advanced packaging hub phases coming online through 2027); CoWoS yield reported >98% (May 2026); OSAT outsource adding ~240-270K wafers/year (Amkor ~180-190K, SPIL ~60-80K). The binding constraint is allocation concentration (NVIDIA >50% of 2026 capacity; Broadcom >240K wafers; AMD next), not gross capacity. ### Supplier Concentration (HHI: 4,658) 65%TSMCTaiwan 15%AmkorSouth Korea 12%ASE Group (SPIL)Taiwan 8%SamsungSouth Korea ### Policy Implication Taiwan concentration in advanced packaging mirrors the fabrication chokepoint. Even with logic-fab geographic diversification under way (TSMC Arizona, Samsung Taylor), packaging stays Taiwan-centric through at least 2028. ### Governance Surface Allied Production Share100% Regime Jurisdiction United States No technology-specific restrictions tracked 57 Moderate 100% of this chokepoint's supply originates in countries with full or allied compute access. No technology-specific export controls currently apply, though allied production share provides latent policy optionality. Demand Growth 40% YoY Substitute Availability 15% Resolution Timeline 2027-2028 Source: TrendForce CoWoS tracker Q1 2026 + Dec 2025 trends note (CoWoS-L/S fully booked); TSMC Q1 2026 earnings call (CoWoS yield >98%, 80%+ packaging growth through 2027); Bernstein 2026 CoWoS demand estimate Monitor: TrendForce quarterly CoWoS capacity tracker and TSMC earnings call guidance Assessed: 2026-05-19 Chiplet Interconnects (UCIe)Elevated (5,063)Resolution: 2028-2030 as UCIe ecosystem matures Concentrating ### Trajectory Assessment UCIe 1.0 is finalized; chiplet adoption is outrunning interconnect capacity. As monolithic die scaling stalls past 3nm, chiplet architectures stop being optional, and high-bandwidth die-to-die interconnect demand rises in lockstep. Q1 2026 reads show the same concentration shape — TSMC ~55% of advanced 2.5D/3D packaging, Intel ~20% (EMIB/Foveros), Samsung ~10% (I-Cube), OSAT/startups ~15%. ### Supplier Concentration (HHI: 3,750) 15% of this market is a residual bucket, squared here as one supplier. HHI is an upper bound by however much that bucket is itself fragmented. 55%TSMC (CoWoS/InFO)Taiwan 20%Intel (EMIB/Foveros)United States 10%Samsung (I-Cube)South Korea 15%Others (OSAT/startups)Various ### Policy Implication Once monolithic die scaling stalls past 3nm, chiplet assembly becomes the binding constraint on next-generation accelerator design. UCIe is open; the packaging capacity that implements it at scale is not — TSMC controls ~55% of advanced 2.5D/3D packaging. The chokepoint is the packaging line, not the standard. ### Governance Surface Allied Production Share85% Regime Jurisdiction United States No technology-specific restrictions tracked 49 Limited 85% of this chokepoint's supply originates in countries with full or allied compute access. No technology-specific export controls currently apply, though allied production share provides latent policy optionality. Demand Growth 50% YoY Substitute Availability 10% Resolution Timeline 2028-2030 as UCIe ecosystem matures Source: UCIe Consortium specifications; TSMC/Intel packaging roadmaps; SemiAnalysis chiplet market analysis 2025-2026 (Tier 3 analyst estimate, methodology undisclosed) Monitor: UCIe Consortium membership and spec updates; TSMC/Intel chiplet packaging capacity announcements Assessed: 2026-05-19 Wafer Inspection & Metrology EquipmentElevated (4,179)Resolution: No clear path — complexity barrier Concentrating ### Trajectory Assessment KLA share has continued rising — 73.8% of metrology + inspection in 2025 (up from 72.6% in 2024) per Dr. Robert Castellano process-control coverage; KLA holds an estimated 55-60% of the overall inspection/metrology market and roughly 75-80% in patterned wafer inspection. AI/HPC and HBM-driven defect-budget intensity, EUV/High-NA rollouts, and advanced-packaging adoption are widening the share gap further. Onto Innovation continues gaining in overlay metrology but not in the e-beam inspection segment where KLA dominance is strongest. No Chinese competitor for sub-3nm inspection tools. KLA advanced-packaging revenue estimated $1.3B+ for FY2026 (40%+ growth). ### Supplier Concentration (HHI: 4,038) 7% of this market is a residual bucket, squared here as one supplier. HHI is an upper bound by however much that bucket is itself fragmented. 60%KLA CorporationUnited States 15%Applied MaterialsUnited States 10%Hitachi High-TechJapan 8%Onto InnovationUnited States 7%OthersVarious ### Policy Implication US companies hold ~83% of wafer-inspection equipment, KLA alone 60%. Unlike EDA (where the May 2025 episode proved the chokepoint was politically actionable in principle), inspection equipment is already controlled under Wassenaar and BIS rules; it is the enforcement layer that keeps advanced fabs from running rather than the lever waiting to be pulled. ### Governance Surface Allied Production Share93% Regime Jurisdiction United StatesNetherlands / EUJapan Active restrictions via US, NL/EU, JP 92 High 93% of this chokepoint's supply originates in countries with full or allied compute access. Technology-specific export controls are in force (penetrability: very difficult to circumvent). Demand Growth 15% YoY Substitute Availability 10% Resolution Timeline No clear path — complexity barrier Source: SemiAnalysis metrology coverage 2025-2026; KLA FY2026 10-Q; Onto Innovation FY2026 10-Q; Dr. Robert Castellano / Semiecosystem 2026 process-control share analysis; Yahoo Finance "KLA Gaining Share" (May 4, 2026) Monitor: KLA quarterly earnings: advanced-node tool shipment mix; Onto Innovation share gains; BIS semiconductor equipment licensing data Assessed: 2026-05-19 Semiconductor-Grade Neon GasModerate (3,547)Resolution: Partially resolved; structural diversification ongoing through 2027 (China commercial supply emergence + US purification expansion) Stable ### Trajectory Assessment Post-2022 diversification meaningfully cut Ukrainian dependence: by 2026, China has emerged as the largest active producer and commercial supplier of neon (chipmakers across East Asia shifted sourcing to Chinese suppliers during the Ukrainian interruption window). Air Liquide commissioned a new ultra-high-purity neon purification unit in Baton Rouge, Louisiana (+200,000 m³/yr, February 2026); Linde secured a multi-year exclusive ultra-high-purity supply agreement with a major US semiconductor manufacturer (January 2026). Ukraine still supplies a meaningful share, so a fresh infrastructure disruption would tighten DUV laser-gas supply, but the system is more resilient than at the 2022 baseline. ### Supplier Concentration (HHI: 3,794) 8% of this market is a residual bucket, squared here as one supplier. HHI is an upper bound by however much that bucket is itself fragmented. 55%Ukraine (Ingas, Cryoin)Ukraine 25%ChinaChina 8%Japan purifiers (Air Liquide, Taiyo Nippon Sanso)Japan 4%Korea purifiers (Linde Korea)South Korea 8%OthersVarious ### Policy Implication Neon feeds the DUV excimer lasers (248nm KrF, 193nm ArF) used for the majority of chip layers even at leading nodes. The 2022 Russia-Ukraine shock priced the vulnerability; diversification since has dampened the concentration without removing it. ### Governance Surface Allied Production Share12% Regime Jurisdiction No tracked regime has jurisdiction over major suppliers No technology-specific restrictions tracked 6 Minimal Allied countries account for 12% of supply; the remainder originates outside tracked allied jurisdictions. Demand Growth 10% YoY Substitute Availability 15% Resolution Timeline Partially resolved; structural diversification ongoing through 2027 (China commercial supply emergence + US purification expansion) Source: USITC Executive Briefing (Ukraine neon and semiconductors); CSIS 2022; SEMI materials survey 2025; SpecGas neon-production-by-country 2026; Air Liquide Feb 2026 Baton Rouge commissioning; Linde Jan 2026 supply-agreement announcement Monitor: Ukraine infrastructure status; Air Liquide/Linde neon capacity announcements; SEMI quarterly materials market data Assessed: 2026-05-19 US Data Center Grid InterconnectionModerate (3,078)Resolution: Reforms in flight (FERC Dec 2025 order + PJM Jan/Feb 2026 compliance filings); structural constraint until queue + transmission build-out catch up to demand Concentrating ### Trajectory Assessment PJM interconnection queue has 6,093 entries with ~30% completion rate; PJM TC1 process under FERC Order 2023 compliance ran ~544 days against a 540-day target, yet queue-entry-to-cluster-study-end remains ~1.75 years (exceeds the one-year efficient-process target). FERC issued a Dec 18, 2025 final order directing PJM to file new co-location tariff rules: PJM compliance filings due Jan 20, 2026 (provisional interconnection access, sub-nameplate service, acceleration) and Feb 16, 2026 (service options + procedures for co-located loads). PJM expects to finish reviewing an additional 63,000 MW through 2026. The reforms are progressing but the queue remains binding. ### Supplier Concentration (HHI: 2,850) 20% of this market is a residual bucket, squared here as one supplier. HHI is an upper bound by however much that bucket is itself fragmented. 40%PJM InterconnectionUnited States 25%ERCOTUnited States 15%MISOUnited States 20%Other ISOs/RTOsUnited States ### Policy Implication Grid interconnection is a binding constraint on US AI-compute expansion that exists independently of GPU supply. Hyperscaler announcements of 1+ GW campuses without interconnection approvals on file are press releases, not capacity plans. ### Governance Surface Allied Production Share100% Regime Jurisdiction United States No technology-specific restrictions tracked 57 Moderate 100% of this chokepoint's supply originates in countries with full or allied compute access. No technology-specific export controls currently apply, though allied production share provides latent policy optionality. Demand Growth 35% YoY Substitute Availability 20% Resolution Timeline Reforms in flight (FERC Dec 2025 order + PJM Jan/Feb 2026 compliance filings); structural constraint until queue + transmission build-out catch up to demand Source: PJM Interconnection Queue data; Monitoring Analytics PJM State of the Market 2024; FERC Dec 18, 2025 final order on PJM co-located load tariffs; RAND RRA3572-1; RMI PJM Speed-to-Power analysis Monitor: PJM quarterly queue updates (entry count, approved MW); FERC reform implementation status Assessed: 2026-05-19 EDA Tools (Advanced Node)Moderate (2,869)Resolution: No clear path Stable ### Trajectory Assessment May-July 2025 BIS restriction episode was imposed and rescinded inside six weeks after Chinese rare-earth retaliation. No controls are in force as of mid-2026; the episode left the chokepoint demonstrably actionable on the technical side and demonstrably fragile on the political side. The collective Synopsys + Cadence + Siemens share remains north of 70% per 2026 market reports — Cadence has closed the gap with Synopsys but the US-headquartered duopoly + Siemens (allied) structure is unchanged. ### Supplier Concentration (HHI: 2,696) 24% of this market is a residual bucket, squared here as one supplier. HHI is an upper bound by however much that bucket is itself fragmented. 32%SynopsysUnited States 30%CadenceUnited States 14%Siemens EDAGermany 24%Others (Keysight, Altium, et al.)United States ### Policy Implication US-headquartered vendors hold ~62% of advanced EDA tools; adding Siemens (Germany) brings allied share to ~76%. No burden-sharing framework exists for splitting the cost of Chinese retaliation if EDA restrictions return, which is the load-bearing reason the May-July 2025 episode was politically expensive. ### Governance Surface Allied Production Share100% Regime Jurisdiction United StatesNetherlands / EUJapan Active restrictions via US, NL/EU, JP 96 High 100% of this chokepoint's supply originates in countries with full or allied compute access. Technology-specific export controls are in force (penetrability: very difficult to circumvent). Demand Growth 12% YoY Substitute Availability 5% Resolution Timeline No clear path Source: CNBC July 2025; BIS letters May 2025; Synopsys/Cadence 10-K filings; Cadence Q1 2026 8-K (FY2026 SEC EDGAR) Monitor: BIS rulemaking on EDA licensing; China MOFCOM export control announcements Assessed: 2026-05-19 EUV Photomasks & PelliclesModerate (2,565)Resolution: No clear path for non-Japan photomask production; pellicle supply constrained through 2028 Concentrating ### Trajectory Assessment At advanced nodes (<7nm), EUV photomask defect tolerance tightens to sub-nanometer scale, so mask fabrication becomes the yield-binding step. EUV pellicles (the ultrathin membranes protecting the mask during exposure) are still supply-constrained; ASML remains the only producer with qualified EUV-pellicle production. Japan controls over half the world's EUV-grade blanks through Toppan, DNP, and HOYA; DNP is pushing toward EUV photomask mass production in FY2027 (FY2026 onward = production-technology establishment) and signed a joint development agreement with imec for next-generation 2nm photomasks. AGC and HOYA are the two named commercial-delivery-capable EUV-mask-blank suppliers per current industry reports. The EUV mask blanks market is projected to scale from $0.3B (2026) to $1.3B (2035) at 16.5% CAGR — concentration unchanged. ### Supplier Concentration (HHI: 2,250) 10% of this market is a residual bucket, squared here as one supplier. HHI is an upper bound by however much that bucket is itself fragmented. 30%ToppanJapan 25%Dai Nippon Printing (DNP)Japan 20%PhotronicsUnited States 15%HOYAJapan 10%OthersVarious ### Policy Implication Photomask and pellicle concentration is a chokepoint comparable to EDA — invisible in most supply-chain analyses, binding at advanced nodes. Japan controls the mask blanks; ASML controls the pellicles. A disruption to either halts EUV lithography regardless of how many ASML systems are on order. EUV systems sit under Wassenaar; the photomask materials feeding them do not, so the leverage is structural rather than regulatory. ### Governance Surface Allied Production Share90% Regime Jurisdiction JapanUnited States No technology-specific restrictions tracked 58 Moderate 90% of this chokepoint's supply originates in countries with full or allied compute access. No technology-specific export controls currently apply, though allied production share provides latent policy optionality. Demand Growth 20% YoY Substitute Availability 5% Resolution Timeline No clear path for non-Japan photomask production; pellicle supply constrained through 2028 Source: SEMI photomask market report 2024; ASML 2025 Annual Report (pellicle development); SemiAnalysis EUV pellicle analysis 2025; DNP March 2026 EUV photomask development announcement; Business Research Insights EUV mask blanks market report. NOTE: market share figures are editorial estimates (authority\_tier 4), not primary-source verified. Monitor: ASML pellicle qualification milestones; Toppan/DNP/HOYA capacity announcements; TSMC EUV layer count per node transition Assessed: 2026-05-19 Photoresist (EUV-grade)Moderate (2,245)Resolution: No clear path for non-Japan-or-Korea production Stable ### Trajectory Assessment Japan controls ~88% of EUV photoresist production (95% of high-end EUV resists per multiple 2025-2026 trackers). JSR was acquired by Japan Industrial Partners (JIP) in 2024, keeping production domestic; JSR is building a MOR (metal-oxide resist) production facility in South Korea, operational end-2026. TOK is expanding its Koriyama plant (EUV/ArF/KrF), operational H2 2026. Both expansions are allied-jurisdiction — no Chinese-domestic EUV-grade qualification path. ### Supplier Concentration (HHI: 2,114) 4% of this market is a residual bucket, squared here as one supplier. HHI is an upper bound by however much that bucket is itself fragmented. 28%JSR CorporationJapan 25%Tokyo Ohka Kogyo (TOK)Japan 20%Shin-Etsu ChemicalJapan 15%FujifilmJapan 8%DuPontUnited States 4%OthersVarious ### Policy Implication Japan controls the chemical inputs for EUV lithography as completely as ASML controls the hardware; Japan has pulled the lever before — photoresist export controls on South Korea in 2019, later relaxed — so this is not a theoretical instrument. ### Governance Surface Allied Production Share96% Regime Jurisdiction Japan No technology-specific restrictions tracked 55 Moderate 96% of this chokepoint's supply originates in countries with full or allied compute access. No technology-specific export controls currently apply, though allied production share provides latent policy optionality. Demand Growth 18% YoY Substitute Availability 10% Resolution Timeline No clear path for non-Japan-or-Korea production Source: Omdia specialty chemicals tracker 2024; JSR/TOK annual reports; SEMI materials market data; TrendForce Nov 2025 (Japan ramping photoresist investment for 2nm); SemiAnalysis Lam/TEL/JSR EUV photoresist coater report Monitor: Japan METI export licensing updates; JSR/TOK capacity announcements; EUV photoresist qualification timelines Assessed: 2026-05-19 Silicon Wafers (300mm)Moderate (1,778)Resolution: Structural — no meaningful diversification trend Stable ### Trajectory Assessment Market structure has been stable for a decade. Japan holds ~54% share (Shin-Etsu + SUMCO, Omdia 2024); 2026 sources put Shin-Etsu at ~28% and SUMCO at ~23% of 300mm output. SUMCO announced termination of 200mm production at its Miyazaki plant by late 2026 to shift capacity into 300mm AI-grade — net effect tightens Japanese concentration in the high-end node, not loosens it. The 2011 Tohoku earthquake remains the calibration precedent: ~25% global supply reduction, 6-month recovery to full capacity. ### Supplier Concentration (HHI: 2,058) 7% of this market is a residual bucket, squared here as one supplier. HHI is an upper bound by however much that bucket is itself fragmented. 30%Shin-Etsu ChemicalJapan 24%SUMCOJapan 17%GlobalWafersTaiwan 12%SiltronicGermany 10%SK SiltronSouth Korea 7%OthersVarious ### Policy Implication Every semiconductor fab on Earth depends on Japanese silicon-wafer production. EUV is a single-company chokepoint; wafers are not — production spreads across multiple Japanese sites — but Japan's country-level concentration stays at ~54%. Taiwan (GlobalWafers, 17%) is the runner-up producer. ### Governance Surface Allied Production Share93% Regime Jurisdiction JapanUnited StatesNetherlands / EU No technology-specific restrictions tracked 67 Moderate 93% of this chokepoint's supply originates in countries with full or allied compute access. No technology-specific export controls currently apply, though allied production share provides latent policy optionality. Demand Growth 8% YoY Substitute Availability 20% Resolution Timeline Structural — no meaningful diversification trend Source: Omdia silicon wafer market tracker 2024; Shin-Etsu/SUMCO annual reports 2024; Intel Market Research 300mm wafer market 2025; SUMCO Feb 2025 capacity announcement Monitor: Shin-Etsu/SUMCO quarterly production reports; Japan seismic alerts (Nankai Trough) Assessed: 2026-05-19 ### Composite methodology and share-coverage bounds Methodology All assessments are Tier 3 (analyst judgment + public data). HHI (Herfindahl-Hirschman Index) is computed from estimated market shares: sum of squared market share percentages on a 0–10,000 scale. Editorial priority composite = HHI × (1 − substitute availability) × (1 + demand growth rate). Substitute availability is an editorial assessment on a 0–1 scale (0 = no substitute exists at any price; 1 = drop-in replacement available at scale). Demand growth rates are annual estimates from industry sources (TrendForce, 650 Group, Omdia). Trajectory assessments are updated quarterly. Because two of its three inputs are hand-assigned, the composite is an editorial ordinal that prioritizes analyst attention, and no measured severity enters it; the formula is deterministic and fully reproducible from the inputs shown in each card. The composite scale is unbounded above 10,000 when demand growth exceeds 0% (the HHI component is capped at 10,000 but the growth multiplier is not). Color thresholds: critical (>7,000), elevated (>4,000), moderate (<4,000).Where multiple competitors are bundled into a residual group, that group is squared as though it were a single supplier, so the HHI is an **upper** bound relative to the actual fragmentation among them. That is the convention in force here: 11 of 14 rows close their share list with such a bucket, ranging 1 to 24 points, and each row’s bucket is shown with its share in the outlook card below so the overstatement can be bounded directly. The opposite convention is implemented and currently dormant: were a row’s known shares to sum below 100%, its HHI would be a lower bound and marked with an asterisk. No row is in that state today; all shares sum to 100%. Sources: ASML, TSMC, SK Hynix annual reports and earnings calls; TrendForce, Omdia, 650 Group / LightCounting, Counterpoint Research market trackers; USGS Mineral Commodity Summaries 2025; MOFCOM Announcement No. 72/2025; PJM Interconnection Queue data; SemiAnalysis; Ajinomoto Co. Annual Report 2025. ### Governance Leverage Score: Methodology #### For policy audiences The Governance Leverage Score (0–100) reads as the share of structural policy surface allied export-control regimes can, in principle, reach over a given chokepoint; a score of 87 means 87% of the leverage points over that node sit inside an existing jurisdictional or regulatory mechanism. It reads as capacity, and recommends nothing about using that capacity. Allied coordination is structurally feasible at the top of the range (EUV lithography, HBM memory, wafer-inspection equipment). At the bottom (gallium, neon) the leverage points fall outside allied reach, where the available levers are alternative-supply development and diplomacy. #### For technical audiences Composite of three weighted components. (1) Allied Production Share (50% weight): sum of market-share percentages from suppliers headquartered in countries with ‘full’ or ‘allied’ compute-access tier; suppliers coded “Various” are excluded (conservative lower bound). (2) Regime Jurisdiction Count (20% weight): how many of the three tracked regimes (US BIS, Netherlands/EU, Japan METI) have jurisdiction over at least one supplier with >10% market share, determined by supplier HQ location; South Korea and Taiwan map to the US regime via FDPR extraterritorial reach over items produced using US-origin technology. (3) Active Export Controls × Penetrability (30% weight): whether the chokepoint’s technology category has active restrictions in the regime-overlap matrix, weighted by an editorial penetrability assessment: impenetrable (1.0), very difficult (0.85), difficult (0.65), porous (0.35), unrestricted (0.0). Caveats. Enforcement effectiveness, existing stockpiles, and the timeline for alternative-supply build-out are not in the score. Penetrability is editorial (Tier 3). A residual bucket coded to no single jurisdiction is excluded from allied share, which understates that share wherever the bundled companies are individually identifiable as allied: 9 nodes have one, the largest being EML Laser Chips (800G+ Optical Interconnect) at 15 points and Chiplet Interconnects (UCIe) at 15 points. Where the residual is instead assigned to a jurisdiction it is counted in full, which is the opposite exposure and the one a reader cannot see from the supplier list: 24 of EDA Tools (Advanced Node)’s allied points are a bucket coded to United States for its dominant remaining supplier, and 20 of US Data Center Grid Interconnection’s allied points are a bucket coded to United States for its dominant remaining supplier. FDPR extraterritorial jurisdiction is treated as equivalent to domestic jurisdiction, which overstates enforceability in the other direction. #### Weight sensitivity How scores shift under alternative weighting of the three components (allied share / regime jurisdiction / active controls). Scores move by up to 26 points. The ordering is not invariant: production-heavy weighting changes 3 pairs, and controls-heavy weighting changes one pair. Equal weighting reorders nothing. Technology Default (50/20/30) Equal (33/33/34) Production-heavy (60/10/30) Controls-heavy (30/20/50) EUV Lithography Systems 100 100 100 100 ABF Substrates (Ajinomoto Build-up Film) 54 42 60 35 Gallium & Germanium (Compound Semiconductors) 0 0 0 0 EML Laser Chips (800G+ Optical Interconnect) 49 39 54 32 High Bandwidth Memory (HBM) 82 73 89 79 Advanced 2.5D Packaging (CoWoS-class) 57 44 63 37 Chiplet Interconnects (UCIe) 49 39 54 32 Wafer Inspection & Metrology Equipment 92 93 91 90 Semiconductor-Grade Neon Gas 6 4 7 4 US Data Center Grid Interconnection 57 44 63 37 EDA Tools (Advanced Node) 96 95 96 93 EUV Photomasks & Pellicles 58 52 61 40 Photoresist (EUV-grade) 55 43 61 35 Silicon Wafers (300mm) 67 64 66 48 ### Supply-chain stress indexfour sub-indices · adjustable weights · monthly composite [ Supply-chain stress index ~50.9 — view full provenance/ 100↑ Elevated · four sub-indices, adjustable weights as of 2026-01 · open the full index below ](#stress) A single 0–100 composite across four sub-indices: demand (WSTS monthly billings, three-month moving average, year on year), concentration (CSET weighted Herfindahl, the same construct the [Chokepoints](/supply-chain/chokepoints) ladder distinguishes from its per-layer figures), capacity (FRED semiconductor utilization), and power (the PJM data-center-region queue-to-operational ratio). Weights default to equal and are adjustable; the monthly series begins at the earliest date all four sub-index sources are available, and its vintage is 2026-01. **Two of the four sub-indices update monthly and two are held constant: demand and capacity move on WSTS billings and FRED utilization, while concentration and power read single-vintage snapshots fixed at that date.** The two flat lines in the series below are those two, and no part of the composite is a forecast. Cite the stress index ### Designer-market concentration over time2022 Q1–2026 Q1 · Epoch AI How concentrated the AI-accelerator **designer** market is, quarter by quarter: a Herfindahl over compute-weighted cumulative shipment shares across Nvidia, Google, AMD, Huawei, Amazon and Cambricon. This is the one quarterly concentration series on the page, and a distinct construct from the per-market figures above and the stress index’s portfolio-weighted Herfindahl. The shaded band is a Scrutica derivation over Epoch’s inputs. It spans the least and most concentrated Herfindahl reachable when each designer’s cumulative shipments move independently across the p5 to p95 range Epoch gives for that designer, so its width tracks how many designers are in the cross-section and how uneven their shares are. It does not measure the looseness of any one estimate. The series falls from a near-monopoly toward a broader field as entrants ship; late quarters flagged incomplete have fewer confirmed designers, so a late tick upward is an artifact of reporting lag. Source: Epoch AI · AI Chip Sales (CC-BY 4.0). Herfindahl over H100-equivalent-weighted cumulative shipment shares by designer; band derived by Scrutica as the Herfindahls reachable across Epoch’s per-designer p5 to p95 shipment ranges. The per-market Herfindahls in the plate and table above are point-in-time editorial estimates. No supply-chain-layer or facility-capacity concentration series is derivable, because the append-only capacity snapshots track individual-facility build-out and have no market cross-section; none is manufactured. ### Consolidation activityownership changes across 4 of 7 ownership-feed layers Three detectors run over 29 ownership-change deals across the 7 layers the ownership feed classifies (CoWoS packaging, chiplets, EDA, advanced substrates, specialty photoresists, datacenter liquid cooling, wide-bandgap power electronics). That set overlaps the tracked chokepoints above without coinciding with them: liquid cooling and power electronics are not tracked as chokepoints, and most tracked chokepoints have no layer here. The detectors are per-layer quarterly anomalies (z > 2 vs the trailing eight-quarter mean), consolidation clusters (one acquirer, three or more deals in a rolling twelve months), and cross-layer actors (one acquirer moving in two or more layers). No anomaly has fired in the recent window: M&A activity in these layers has stayed within its historical baseline. The archive preserves the historical patterns the detectors surfaced retroactively. Recent anomalies 0 \+ 1 historical · last 18 mo Cross-layer actors 0 ≥ 2 layers within 12 months Total events 29 all-time, ownership-change deals ### How the detectors work The feed aggregates ownership-change events (Buyout, M&A, Corporate Divestiture, Asset Sale, Public-to-Private, Secondary Buyout, Spin-Off, Reverse Merger, Joint Venture) from a licensed corporate-ownership database, filtered to the AI-compute chokepoint universe via per-organization layer classifications, and aggregated by quarter. Three detectors run over that series: - **Per-layer quarterly anomaly**: a quarter whose event count exceeds the trailing eight-quarter mean by z > 2, with a secondary absolute gate (observed − mean ≥ 2) so a jump from zero to two events in a thin layer does not trip on variance alone. - **Consolidation cluster**: one canonical acquirer closing three or more deals inside a single layer within a rolling twelve months. - **Cross-layer actor**: one canonical acquirer active in two or more layers within twelve months, a structurally different governance signal from concentration inside a single layer. Anomalies persist archivally with stable identifiers. The date badge distinguishes recent activity (≤ 18 months) from historical patterns the detectors surface retroactively; an “open” anomaly can reference a quarter from decades ago, so the recent counts above are the subset whose reference window lands in the trailing eighteen months. Disclosure of deal dollar amounts runs about 46%; the event counts are complete. All classification and anomaly assessment is Tier 2–3 (a licensed research database plus rule-defined detection over it).