Feedback loop inventory

R1Dominance reinforcer

China leverage → controls → Western pain → reshoring → window closes → tighter controls. No natural dampener; checked only by B1/B2 with multi-year delays.

R2Escalation spiral

US controls → China domestic investment → capability → US perceives threat → tighter controls. Ratchet structure. No natural ceiling.

R3ASML monopoly loop

ASML supernormal profits → R&D reinvestment → High-NA EUV → reinforces monopoly. Self-reinforcing dominance flywheel.

B1Price correction

Scarcity → price spike → refining investment → supply relief. 3–7 yr delay means R1 runs several cycles before this fires. Classic overshoot structure.

B2Substitution escape

Price pain → R&D → substitute → demand relief. 5–12 yr delay. Only loop that permanently breaks a choke-point. Highest uncertainty.

B3Fab capacity correction

Throughput pain → capex → new fab capacity → output relief. 3–5 yr delay. US grid queue now the binding constraint — adds another 5+ yr layer.

Causal loop diagram

China material leverage Export control severity Western semicon. pain Material scarcity Material spot price Reshoring investment Western refining capacity China's leverage window (closing) Substitute R&D invest. Geopolitical tension US tech export controls China domestic semicon. capability Fab water/ energy stress New fab capacity Substitute viability AI / HPC demand R1 R2 B1 B2 B3 R3 Delay structure: B1 = 3–7 yr (refining build) | B2 = 5–12 yr (R&D → commercialisation) | B3 = 3–5 yr (fab construction + grid queue 5+ yr)
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