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Semiconductor Ecosystem Choke-Points — System Dynamics Analysis

An interactive system dynamics analysis of critical material dependencies, geopolitical feedback loops, and substitution timelines in the global semiconductor and high-performance computing supply chain.

Static analaysis. Runs directly in browser.


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Modules

# Module Type Description
00 index.html Overview Project landing page, methodology, five-loop architecture reference
01 01-driver-tree.html Static Five-level dependency map (L1 infrastructure → L5 HPC output). Click any node for substitution timeline assessment.
02 02-cld.html Diagram Full causal loop diagram. 5 feedback loops (R1, R2, R3, B1, B2, B3). Endogenous geopolitics. Clickable nodes and loop cards.
03 03-materials-sim.html Simulation R1 + B1 + B2 stock-and-flow. Adjust export control severity, refining build delay (B1), substitution horizon (B2), reshoring strength. Four scenario presets.
04 04-escalation-sim.html Simulation R2 escalation spiral. China capability stock vs. US control intensity. Perception lag, diplomatic friction, allied alignment. Four scenario presets.
05 05-pain-decomposed.html Decomposition Why "Western semiconductor pain" as a single scalar is a modelling error. Four inflow channels, five response functions, interactive policy threshold simulator.

Key System Dynamics Findings

R1 — Dominance Reinforcer (reinforcing)

China material leverage → export controls → Western pain → reshoring → closing window → tighter controls. No natural dampener. Checked only by B1 and B2, both delayed by years. R1 compounds for 3–7 cycles before any correction fires.

R2 — Escalation Spiral (reinforcing, ratchet)

US tech export controls → China domestic semiconductor investment → capability growth → US perceives threat (with 2yr lag) → tighter controls. No natural ceiling. Each iteration raises both stocks' floors. The only deflationary path requires a diplomatic variable not in the physical system.

B1 — Price Correction (balancing, 3–7 yr delay)

Material scarcity → price spike → refining investment → Western capacity. Fires after R1 has already compounded. Produces structural overshoot.

B2 — Substitution Escape (balancing, 5–12 yr delay)

Sustained price pain → substitute R&D → viable substitute → demand relief. The only loop that permanently breaks a choke-point. Longest delay; most underinvested.

B3 — Fab Capacity Correction (balancing, 3–5 yr + grid queue)

Throughput pain → capex → new fab → output relief. US grid interconnection queue (5+ years) extends the effective delay to 6–9 years.


The Pain Node Decomposition (Module 05)

The CLD's most common modelling error is treating "Western semiconductor pain" as a single scalar. The correct structure has four distinct inflow channels:

Channel Visibility Response triggered Structural impact
Cost inflation Quarterly earnings Procurement hedging Low — market noise
Throughput constraint Guidance misses Capex reshoring (B1) High
Latent vulnerability Invisible in financials Strategic stockpiling Very high — trigger for acute crises
Competitive erosion Geopolitical premium Export controls (R2) High — irreversible

Investment Framework

Position Choke-point Window Entry signal Exit trigger
Long (max conviction) Gallium, Germanium, REE 0–2 yr Critical Export control announcement Western refinery capacity announcement
Long (max conviction) Helium 0–2 yr Critical Hormuz/GCC incident Fab recycling investment scale
Long (high conviction) Tungsten APT 0–2 yr China export controls activation Almonty Korea ramp + scrap supply inflection
Long (medium) HBM memory capacity 2–5 yr Throughput pain in guidance Micron HBM3E volume ramp
Long (structural) Grid infrastructure Structural Now — queue already 2,300 GW NEPA reform + SMR construction starts
Short-watch Legacy DRAM Transitioning HBM cannibalises margin Demand shift complete

Technical Stack

  • Pure HTML5 / CSS3 / vanilla JavaScript
  • Chart.js 4.4.1 via CDN for simulation charts
  • IBM Plex Mono + IBM Plex Sans via Google Fonts
  • No build step, no npm, no frameworks
  • All simulations run client-side in the browser

Methodology Notes

Confidence tiers

  • S-rank (≥90%): ASML annual reports, USGS, IEA, BIS filings
  • A-rank (75–85%): CSIS, Carnegie Endowment, BCG, JPMorgan, Goldman Sachs
  • B-rank (60–75%): TrendForce, Silicon Analysts, Fusion Worldwide, BMO Capital Markets
  • C-rank (<60%): Flagged explicitly where used

Simulation caveats

The stock-and-flow simulations are qualitative dynamic models, not econometric forecasts. Parameters are calibrated to order-of-magnitude real-world timelines but are not regression-fitted to historical data. The purpose is to reveal structural dynamics (overshoot, ratchet behaviour, delay-driven oscillation), not to generate point forecasts.

Geopolitics as endogenous variable

China's export control decisions and US policy responses are modelled as feedback variables inside the system — not external shocks. This reveals how the system generates its own crises through R1 and R2. The trade-off: the model cannot capture exogenous diplomatic breakthroughs, which would need to be represented as parameter changes (reduce diplomatic friction in Module 04).


Key Sources

  • ASML Holding N.V. Annual Report 2024
  • U.S. Geological Survey (USGS). Mineral Commodity Summaries 2024–2025
  • International Energy Agency (IEA). Critical Minerals Market Review 2024
  • Lawrence Berkeley National Laboratory. Grid Interconnection Queue 2024
  • CSIS. Mineral Demands for Resilient Semiconductor Supply Chains. 2025
  • CSET Georgetown. Tracing the Emergence of Extreme Ultraviolet Lithography. 2023
  • Carnegie Endowment for International Peace. South Korea Semiconductor Vulnerability Assessment. 2026
  • JPMorgan Asset Management. Mid-Year Investment Outlook 2026
  • Goldman Sachs. Data Centre Power Demand: The New Infrastructure Constraint. 2026
  • Fusion Worldwide. Inside the AI Bottleneck: CoWoS, HBM, and 2–3nm Capacity Constraints. 2026
  • BMO Capital Markets. Tungsten Market Report Q1 2026
  • Barclays Research. Asia Semiconductor Supply Chain: Helium Dependency Analysis. 2024
  • TNFD. Water Dependency of the Tech Sector — Case Study. February 2026

Proprietary research synthesis · May 2026 · For institutional use only · Not financial advice

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