Provenance
This standalone page was migrated from the February 2026 compendium corpus.
Evidence Quality Rating: [PLAUSIBLE] — Most intellectually original thesis.
The channel argues that the highest-alpha investment opportunities exist in companies with 90%+ market share in a single critical process step with no near substitute — the “hidden” companies inside supply chains that most investors have never heard of.
Bull Case
This thesis identifies a genuine structural feature of modern supply chains: extreme concentration at obscure mid-stack nodes. The semiconductor research confirms the packaging bottleneck data:
| Company | Market Share | Headquarters |
|---|---|---|
| ASE | 44.6% | Taiwan |
| Amkor | 15.2% | U.S./Global |
| JCET | 12.0% | China |
China holds approximately 30% of the advanced packaging market specifically. For CoWoS packaging (critical for Nvidia AI accelerators), concentration is even more extreme, with TSMC handling the majority in-house at Taiwan facilities.
The Nexperia/Newport Wafer Fab case demonstrates that governments now treat even legacy fabs and packaging facilities as sovereignty assets, with the U.S. successfully pressuring the UK to force divestiture under national security laws. CFIUS and its equivalents are expanding scope to cover more mid-stack companies.
The investment logic is compelling: these companies have pricing power invisible to traditional analysis (customers cannot switch), policy protection (governments will intervene to prevent foreign acquisition), and low correlation with broad market sentiment (limited analyst coverage, small/mid-cap). They represent the kind of non-consensus idea that the Five Factor framework is best at generating.
Bear Case
The thesis is strong conceptually but weak operationally for three reasons:
No systematic screen. The channel identifies the concept but does not provide a methodology for finding these companies. The screening criteria proposed in Section 3.4 above represents an attempt to operationalize the thesis, but it requires data sources (global market share by process step, substitutability assessments) that are not readily available to most investors.
Access problems. Many process-stack monopolies are subsidiaries of larger conglomerates (Shin-Etsu’s specialty materials division, Nitto Denko’s semiconductor films), Japanese private companies, or state-owned enterprises. They are not easily accessible to public market investors as pure plays.
Fragility risk. Monopoly positions may be more fragile than the channel suggests. ASML’s EUV disrupted prior lithography monopolies. Material science advances can create substitutes. Government-mandated technology sharing or open licensing could destroy pricing power. The “no substitute” claim requires continuous verification.
Key Variables to Watch
- Government-funded programs to diversify packaging and specialty materials (CHIPS Act funding beyond fabrication)
- M&A activity in semiconductor materials/packaging (signals strategic value recognition)
- Academic/industrial breakthroughs in material substitution
- Whether CFIUS/equivalent bodies expand scope to cover more mid-stack companies
Falsification Triggers
- A major process monopoly loses significant market share to a new entrant within 3-5 years (proving substitutability)
- Governments mandate open licensing of critical process technologies, destroying pricing power
- Companies identified turn out to have low margins despite high market share (commodity economics despite monopoly position)
Timeline Assessment
The channel’s 5-20 year framing is appropriate. Process monopolies are durable precisely because they take decades to establish and competitors cannot replicate them quickly. The thesis is valid as a direction for research, but the investment timing must be matched to specific company situations. The highest-value application is for investors with the resources to conduct deep supply-chain mapping — institutional allocators, family offices, and specialist funds rather than retail investors following channel recommendations.