Provenance
This standalone page was migrated from the February 2026 compendium corpus.
Process-level monopolies represent the channel’s most intellectually distinctive contribution, developed primarily in the late-period videos (December 2025 through February 2026). The concept identifies companies with 90% or greater market share in a single critical process step with no near-term substitute.
The Concept
The channel argues that the next phase of chokepoint analysis moves beyond geographic routes and raw materials to hidden monopolies inside production stacks — companies that control a single indispensable process step that the entire supply chain depends on.
This is the most original late-period contribution to the framework. The logic is straightforward: modern supply chains are deep, with dozens of specialized steps between raw material and finished product. At certain steps, one company (or a very small number) has achieved dominance through proprietary processes, accumulated expertise, or regulatory barriers. These companies are invisible to most investors because they are mid-stack — neither the headline brand nor the raw material supplier — but they are indispensable.
Key Examples
ASML (EUV Lithography). ASML is the sole manufacturer of extreme ultraviolet (EUV) lithography systems, which are required for manufacturing semiconductors below 7nm. No other company can produce these machines. A single EUV system costs approximately $200-350 million, weighs 180 tonnes, and requires multiple 747 cargo aircraft to ship. ASML’s monopoly is protected by decades of accumulated physics and engineering expertise, billions in cumulative R&D, and a supplier network that itself contains single-source dependencies (Carl Zeiss for optics, Cymer/ASML for light sources). The Dutch government’s export control decisions on EUV systems to China are among the most consequential chokepoint actions of the current era.
Nitto Denko (Specialty Semiconductor Materials). The channel cites Nitto Denko as claiming approximately 90% share in specific semiconductor materials with no near substitute. While specific market share figures for individual material lines are proprietary, Nitto Denko is confirmed as a dominant supplier of optical films, semiconductor process tapes, and specialty adhesives used in chip packaging. The company’s position illustrates the process-monopoly concept: a Japanese materials company that few investors have heard of holds a position as strategically important as any fab.
Advanced Packaging Concentration. As documented above, ASE (Taiwan) holds 44.6% of the OSAT market. For specific advanced packaging processes — particularly Chip-on-Wafer-on-Substrate (CoWoS) used in Nvidia’s AI accelerators — concentration is even more extreme, with TSMC handling the majority of CoWoS packaging in-house at facilities concentrated in Taiwan.
Proposed Screening Methodology
The channel suggests identifying process-stack monopolies but does not provide a systematic screen. Based on the framework’s logic, a screen would require:
- Market share threshold: 70%+ of a specific process step by a single company or 90%+ by three or fewer companies.
- Substitutability test: No commercially viable alternative exists within a 3-5 year horizon.
- Criticality test: Disruption of the process step would halt or severely degrade production of a downstream product with defense or critical infrastructure applications.
- Policy protection test: At least one government has taken or is likely to take action (export controls, foreign investment screening, subsidies) to protect or diversify the process step.
Companies meeting all four criteria would qualify as process-level monopolies. This screen would need to be applied across semiconductor materials, specialty chemicals, precision machinery, and defense component supply chains.
Investment Implications
Process-level monopolies possess several characteristics that make them attractive to the Five Factor framework:
- Pricing power invisible to traditional analysis: Their customers literally cannot switch, creating margin durability that does not appear in standard competitive analysis.
- Government protection: As the Nexperia case demonstrates, governments will intervene to prevent foreign acquisition, creating a floor under strategic value.
- Low market correlation: Many of these companies are small or mid-cap with limited analyst coverage, meaning their strategic value is not priced in by conventional equity markets.
Limitations
The thesis is strong conceptually but weak operationally. Many process-stack monopolies are subsidiaries of larger conglomerates (Shin-Etsu’s specialty materials division), Japanese private companies, or state-owned enterprises — not easily accessible to public market investors. Monopoly positions may also be more fragile than the channel suggests: material science advances can create substitutes, and government intervention can force technology sharing. The “no substitute” claim requires continuous verification — it is a snapshot, not a permanent condition.
Furthermore, the channel does not name specific investable positions beyond the Nitto reference. Operationalizing this thesis requires substantial additional research into semiconductor materials, specialty chemicals, precision tooling, and defense component supply chains — exactly the kind of deep supply-chain mapping that most investors lack the resources or expertise to perform. This is perhaps why the channel frames it as a direction for analysis rather than a specific trade recommendation.