--- title: Non-Traditional Chokepoints description: Non-Traditional Chokepoints image: https://periplo.us/hubfs/undefined-Nov-09-2026-02-58-21-7559-PM.png --- [Skip to content](https://periplo.us/periplous-llc-blog/non-traditional-chokepoints#main-content) [![\_Periplous\_Secondary\_Logo\_White](https://periplo.us/hs-fs/hubfs/_Periplous_Secondary_Logo_White.png?width=7034&height=1165&name=_Periplous_Secondary_Logo_White.png)](https://periplo.us) - About Show submenu for About - [Michael Hochberg](https://periplo.us/hochberg-about) - [Rodger Baker](https://periplo.us/baker-about) - [Christine Clay](https://periplo.us/clay-about) - [Services](https://periplo.us/services) - [Reports](https://periplo.us/periplous-llc-blog) Open main navigation Close main navigation - About Show submenu for About - [Michael Hochberg](https://periplo.us/hochberg-about) - [Rodger Baker](https://periplo.us/baker-about) - [Christine Clay](https://periplo.us/clay-about) - [Services](https://periplo.us/services) - [Reports](https://periplo.us/periplous-llc-blog) - [Contact us](https://periplo.us/contact-us) [Contact us](https://periplo.us/contact-us) [All posts](https://periplo.us/periplous-llc-blog/all) November 9, 2026 # Non-Traditional Chokepoints ![Picture of Rodger Baker](https://periplo.us/hs-fs/hubfs/rodger%20baker.jpg?width=50&name=rodger%20baker.jpg) By  Rodger Baker  ·  6 minute read BLUF Chokepoints - from the Strait of Malacca to the Panama Canal - are no longer underappreciated risks to international trade and economic security. But narrow waterways are not the only potential “chokepoints” to international supply chains - there are other geographically focused risks to consider; from concentrations of raw materials or processing to control over key technologies through IP, manufacturing, or regulations. Key Points - Chokepoints are not limited to geography, and they operate in layers. Raw materials feed processing, processing feeds subcomponents, subcomponents feed specialized manufacturing. - The headline chokepoint is rarely the only one. For example, EUV lithography depends on Zeiss optics, Japanese mask blanks, photoresist, and monopoly on inspection. Leverage is spread across the globe. - Processing is more important than possession. China’s dominance in rare earths and critical minerals comes from refining and engineered intermediates, not the mines. - Regulation is the emerging layer. Licensing regimes allow states to create, tighten, or pause a chokepoint by notice, targeting single firms as well as entire states. - Use erodes leverage. Each cutoff pushes targets toward substitutes or innovation. The strongest chokepoints are often the ones held in reserve, with their power coming from possibility. What are Chokepoints? Geopolitical risk assessments frequently identify chokepoints as fixed places on a map: straits, canals, and passes whose strategic value comes from a combination of their key location between suppliers and consumers and their geographic vulnerability to disruption. But some of the most consequential chokepoints may not appear as physical features on the map. Rather, they are defined by concentrations and narrowings of global supply chains based on critical inputs and technologies. A common example comes from the semiconductor space. Dutch based ASML is the only company producing the extreme ultraviolet (EUV) lithography machines needed for the most advanced chips. If its machines, or the expertise to install and service them, stop reaching customers, cutting-edge chipmaking stalls. Yet ASML itself is downstream of other chokepoints - its machines depend on optics and lasers that only Germany-based Zeiss and Trumpf can produce, and these companies in turn rely on their own narrow set of suppliers. The deeper you trace a supply chain, the more potential single points of failure you may find - and these “squeezes” are as critical as traditional maritime chokepoints. What makes a place, item, or method a chokepoint is not its overall size, but its concentration and limited replaceability. If there are few or no substitutes, if alternative supplies require major reshaping of products or could take years to acquire, if all the subcomponents or precursor materials trace back to a small number of suppliers or a single geographic region, it is likely a potential chokepoint for supplies. Like straits and canals, these supply chain chokepoints can be interrupted by those that control them, or by external factors that disrupt. ![](https://periplo.us/hs-fs/hubfs/undefined-Nov-09-2026-02-58-21-7559-PM.png?width=2048&height=1134&name=undefined-Nov-09-2026-02-58-21-7559-PM.png) The Layers of Chokepoints | Layer | What it Covers | Example | Primary Actor | | --- | --- | --- | --- | | **Raw Materials** | Ores and minerals | Tungsten, indium, rare earths, critical minerals | China | | **Processing** | Refining, powders, engineered intermediates | Tungsten powder, gallium, indium phosphide wafers | China | | **Key Subcomponents** | Parts and materials within finished systems | ABF film, EUV mask blanks, HBM memory, optics & lasers | Japan, South Korea, Germany | | **Specialized Manufacturing** | Tools and processes few can replicate | EUV lithography, actinic mask inspection | Netherlands, Germany, Japan | | **Regulation** | Licenses, controls, and sanctions on flow | Export licensing, entity lists | Any state with a preceding layer | Layers in Practice We can think of these potential chokepoints by looking at different layers of supply chains. At the base, we encounter the raw materials and the initial processing. Next, we consider important subcomponents, or specialized manufacturing (particularly control over the tools for manufacturing). Finally, we can look at the regulatory levers that countries employ to act on non-traditional chokepoints. Raw Materials and Processing: China has, over the past two decades, emerged as a, if not the, most important source for numerous key minerals, often both at the minehead and initial refining. It produces close to 70 percent of global rare earth element (REE) ores, and processes about 90 percent of global REE supplies. China produces about [99% of the world’s gallium](https://pubs.usgs.gov/periodicals/mcs2026/mcs2026-gallium.pdf), for example, a metal critical in the semiconductor and optical electronics industries, and [refines about 70% of the world’s indium](https://docs.google.com/document/d/1Xj9TTmoW-dzmot-OStWSKYngNxus6jFaaeYQJ-eOdg0/edit?tab=t.0#:~:text=in%20visuals%20folder.-,China%20tightens%20indium%20export%20checks%20as%20AI%20demand%20increases%20%7C%20Reuters,-China%20tightens%20indium), used for semiconductors, flatscreens, and touch screens. For many minerals, even where China is not the majority of minehead production, it still dominates global refining. This has resulted in Beijing effectively being able to set global prices, adjust prices to deter competition, and use disruptions of exports as a tool of political coercion. In August 2023, China placed expanded licensing restrictions on gallium and germanium exports. In early 2005, China’s Ministry of Commerce and the General Administration of Customs[added additional export restrictions](https://www.iea.org/policies/26795) on tungsten, tellurium, bismuth, molybdenum, and indium. China’s export controls often informally target key political or economic competitors - Japan, the United States, South Korea, Germany, or the Netherlands. As such, Beijing can use its domination of critical mineral supplies to “punish” opponents. But in doing so, those who use the downstream components and products (for example those reliant on semiconductors made in Japan), also feel the pinch. Key Subcomponents: At times, subcomponents and materials become the most significant potential chokepoints. For example, the production of high-bandwidth memory (HBM), critical for AI training and inference accelerators. Only three firms make the HBM that AI accelerators require, two of which are South Korean. In Q2 2026, [SK Hynix held ~50% of revenue, Samsung held ~33%, and Micron held ~18%](https://siliconanalysts.com/analysis/hbm4-market-share-race-2026). If there are any political or security disruptions in or around South Korea (a country in a rather volatile neighborhood), it would create rapid multi-order impacts to the global AI race. At times, chokepoint risks can come from unexpected sources. A key insulation film for high-end Central Processing Units (CPU) - [Ajinomoto Build-up Film](https://www.aft-website.com/en/products/insulating_film-abf/) (ABF) - is [made almost exclusively by a single Japanese company](https://finance.biggo.com/news/ZU2KJZ4BpwxG186NIOsE), Ajinomoto, that was initially a food science company, and still produces food seasonings. ABF is the insulating film inside advanced chip package substrates, controlled by a single company with near-total market power. ABF is currently produced at only two sites, one in Kawasaki, Kanagawa Prefecture, and the other in Showa Village, Gunma Prefecture, but the company is [adding a third site at Kani-Mitake Interchange Industrial Park](https://www.ic-pcb.com/japanese-materials-supplier-ajinomoto-to-build-new-abf-plant-by-2032-as-ai-demand-lifts-margins-above-50.html) in Kani City, Gifu Prefecture. None of the factories are more than 150 miles apart as the crow flies, meaning that production is not only concentrated in a single company, it is also in a narrow geographic region. When subcomponents are concentrated into only one or two corporations, they can become particularly vulnerable. In 2024, after U.S. drone maker Skydio sold drones to Taiwan’s firefighting departments, [Chinese authorities ordered its sole battery supplier to halt shipments](https://apps.digitimes.com/news/a20241128PD213/taiwan-fire-sales-dji-government.html). As Skydio was dependent almost exclusively on the Chinese-based Dongguan Poweramp Technology Ltd. for its lithium-ion batteries, it had few options in the immediate aftermath of Chinese sanctions. Specialized Manufacturing: The EUV lithography supply chain, noted above, is a clear case of a stacked layer chokepoint. Beyond ASML and Zeiss, [Hoya and AGC hold the EUV mask blanks](https://semiconductorx.com/semiconductor-euv-mask-blanks.html) market. [Lasertec](https://www.lasertec.co.jp/en/ir/individuals/creation.html)is the only company that sells actinic EUV mask inspection. Without flawless blanks and sufficient inspection, an EUV machine has nothing to print. Ultimately, that puts more layers of EUV leverage in Japan than in the Netherlands – the country that is commonly seen as the chokepoint. But not every constraint is a chokepoint. Lead times for [U.S. generator step-up transformers passed 160 weeks in early 2026](https://www.ajot.com/news/us-power-companies-scramble-to-secure-equipment-as-surging-data-center-demand-strains-supplies), limiting how fast AI datacenters can be built with sufficient new power. In this case, however, it isn't a particular company or geography that dominates the space, it is just a rapid surge in demand that outstrips global production capacity. That makes them a bottleneck, not a chokepoint. Look one level down, though, and chokepoints reappear: the grain-oriented electrical steel in a transformer’s core has a single U.S. producer. Whether a constraint is a bottleneck or a chokepoint depends on how far down the chain you look. How Regulation Impacts Chokepoints Regulation does not necessarily create dependence, but it can impact whether and when dependent relationships move from “win-win” to applied leverage. China’s export controls since 2023 show a clear and sharpening escalation ladder: - Licensing. Gallium and germanium from August 2023, tungsten, indium, and others from February 2025 - Country bans. December 2024 ban on gallium, germanium, and antimony exports to the United States - Extraterritorial reach. October 2025 rule that covers foreign-made goods containing Chinese-origin rare earths worth 0.1% or more of their value - Firm-by-firm targeting. The aforementioned Skydio cutoff and, in June 2026, the addition of MP Materials and USA Rare Earth to China’s export control list. These are the very companies attempting to build non-China supply. Washington has historically used regulations to control critical supply transfers, and Beijing is now confident to use the same tools. But both also remain cautious, particularly in their bilateral interactions, as seen in the [Busan truce being extended until January 2027](https://www.reuters.com/world/china/us-china-agree-extend-the-busan-agreement-until-january-bessent-says-2026-09-23/). Unlike physical chokepoints, regulatory tools initially seem more flexible. A regulatory chokepoint can be closed, paused, and reopened, often with little effort. That makes them increasingly attractive tools in countries’ competition arsenals, but over time it can create such a sense of uncertainty that alternative supply chains begin to emerge as the cost of disruption exceeds the cost of expansion. Despite being the target of several Chinese actions, Japan has thus far largely refrained from using its key position in many high-end supply chains to invoke a regulatory chokepoint. Though there were brief disruptions to South Korea triggered by political issues, Tokyo has generally preferred to absorb Chinese pressures and align its controls with Washington’s, rather than act alone, but it has an outsized capacity to do so if it desires. Final Thoughts Non-geographic chokepoints are rarely single pressure points. Rather, they are layers within a supply chain. The most consequential of these layers are often the least visible, and the hardest to replace. The coming months will be a test of the regulatory layer. China’s pause on its October 2025 rare earth package lapses in January, and the suspended ban on exports of gallium, germanium, and antimony to the U.S. lapses on November 27th. Beijing and Washington have indicated that any further arrangements will likely be negotiated at the APEC and G20 summits, in late November and early December respectively. Every leveraging of a chokepoint also starts a clock. Targets respond with stockpiling, developing new suppliers, or building their own capacity – as Western firms are now doing with rare earths and China with chips. The strongest position is often the one held in reserve. Chokepoints are not just where dependence exists, but where dependence intersects with an actor who can and will leverage it. 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