{
  "id": "S02",
  "slug": "single-supplier-cut-off",
  "title": "Single-supplier cut-off",
  "version": "0.2.0",
  "status": "active",
  "orientation": "downside",
  "family": "A",
  "short_title": "Single-supplier cut-off",
  "thematics": [
    "economic-security-supply-chains",
    "ai-cyber-digital"
  ],
  "likelihood_type": "systemic",
  "likelihood_note": null,
  "scores": {
    "likelihood_2y": {
      "band": 5,
      "rationale": "Two Standard Severe episodes in 2025 alone."
    },
    "likelihood_10y": {
      "band": 5,
      "rationale": ""
    },
    "impact_systemic": {
      "level": 3,
      "rationale": "Sectoral rather than economy-wide, but global in reach."
    },
    "impact_national": {
      "level": 4,
      "rationale": "For manufacturing economies without stockpiles."
    },
    "confidence": {
      "level": "high",
      "reason": ""
    },
    "priority": 20,
    "tier": "I",
    "source": "ginc-desk-v0.2"
  },
  "scorecard": {
    "onset": "sudden",
    "duration": "1 year",
    "warning": "days",
    "scope": "global",
    "origin": "adversarial (great power)",
    "external_support": "partial",
    "policy_response": "current plans",
    "recovery_horizon": "years"
  },
  "summary": "The dominant supplier of a critical input halts or licenses exports for a year. The input may be rare earth magnets, legacy semiconductors, active pharmaceutical ingredients, fertiliser, lithography tools or cloud compute. Substitution takes 18 to 36 months. Production lines, hospitals and farms discover their exposure through stoppages rather than audits. v0.2 widened this scenario from minerals and chips to any input with a supplier share above 40 per cent, following Norway's drug-shortage scenario and the Nexperia stoppage.",
  "narrative": {
    "dateline": "February 2028",
    "text": "The licence regime is announced as 'orderly'. Within a month, applications are backing up and approval depends on end-use declarations that no automotive supplier can honestly complete. A tier-two parts maker in Bavaria stops shipping door-control modules; the assembly plant runs out of them on day nine. In Hyderabad, a generics manufacturer learns that its intermediate supplier has lost its export permit, and a hospital pharmacy in Lusaka learns it three months later when the tender fails. Fertiliser buyers in East Africa discover that the alternative source has already been contracted by larger buyers at twice the price. Governments convene task forces, publish lists of critical inputs and discover they do not know the second and third tiers of their own supply chains. Stockpiles that looked ample on a spreadsheet turn out to be the wrong grade. Eighteen months in, two new refineries and one packaging plant have been announced; none is running. The supplier offers to resume exports to governments that sign side-letters on unrelated matters, and several do."
  },
  "anchors": [
    {
      "shock_id": "nexperia-export-halt-2025",
      "date": "October 2025",
      "event": "Nexperia export halt",
      "what_happened": "After the Dutch government took control of Nexperia on 30 September, China blocked exports from Nexperia's Chinese plants; European and Japanese carmakers warned of line stoppages within weeks",
      "calibrates": "speed of stoppage; legacy chips"
    },
    {
      "shock_id": "china-rare-earth-controls-2025",
      "date": "April and October 2025",
      "event": "China rare earth controls",
      "what_happened": "Licensing of heavy rare earths and magnets; one-year suspension agreed 30 October 2025",
      "calibrates": "licensing as coercion"
    },
    {
      "shock_id": "china-rare-earth-embargo-on-japan-2010",
      "date": "September 2010",
      "event": "China rare earth embargo on Japan",
      "what_happened": "Informal halt of exports for about two months during the Senkaku dispute",
      "calibrates": "precedent and recovery"
    },
    {
      "shock_id": "global-semiconductor-shortage-2021",
      "date": "2021–2022",
      "event": "Global semiconductor shortage",
      "what_happened": "Vehicle production cut by millions of units; lead times beyond 50 weeks",
      "calibrates": "substitution lead times"
    },
    {
      "shock_id": "norway-aks-drug-shortage-scenario-2019",
      "date": "2019",
      "event": "Norway AKS 'drug shortage' scenario",
      "what_happened": "National scenario of pharmaceutical supply failure",
      "calibrates": "medicines as critical input"
    },
    {
      "shock_id": "fertiliser-and-black-sea-2022",
      "date": "2022",
      "event": "Fertiliser and Black Sea",
      "what_happened": "Potash and nitrogen export disruption; prices doubled",
      "calibrates": "fertiliser pathway"
    }
  ],
  "parameters": {
    "common": {
      "severity": {
        "major": "major",
        "severe": "severe",
        "extreme": "extreme"
      },
      "duration": {
        "major": null,
        "severe": "1 year",
        "extreme": null
      },
      "onset": {
        "major": null,
        "severe": "sudden",
        "extreme": null
      },
      "warning": {
        "major": null,
        "severe": "days",
        "extreme": null
      },
      "scope": {
        "major": null,
        "severe": "global",
        "extreme": null
      },
      "origin": {
        "major": null,
        "severe": "adversarial (great power)",
        "extreme": null
      },
      "external_support": {
        "major": null,
        "severe": "partial",
        "extreme": null
      },
      "concurrency": {
        "major": null,
        "severe": "standalone",
        "extreme": null
      },
      "policy_response": {
        "major": null,
        "severe": "current plans",
        "extreme": null
      },
      "recovery_horizon": {
        "major": null,
        "severe": "years",
        "extreme": null
      }
    },
    "specific": [
      {
        "name": "Input class",
        "default": "rare earth magnets",
        "range": "options: legacy chips / APIs / fertiliser / lithography tools / cloud compute",
        "unit": null,
        "note": null
      },
      {
        "name": "Supplier share of global supply",
        "default": "70 per cent",
        "range": "40–95",
        "unit": "per cent",
        "note": null
      },
      {
        "name": "Substitution lead time",
        "default": "24 months",
        "range": "6–48",
        "unit": "months",
        "note": null
      },
      {
        "name": "National stockpile coverage",
        "default": "3 months",
        "range": "0–12",
        "unit": "months",
        "note": null
      },
      {
        "name": "Licensing versus outright ban",
        "default": "licensing",
        "range": null,
        "unit": null,
        "note": "ban at Extreme"
      }
    ]
  },
  "transmission": [
    "Export halt or licence backlog.",
    "Tier-two and tier-three stoppages surface within weeks.",
    "Price spike on alternative sources; larger buyers pre-empt supply.",
    "Production cuts, hospital shortages, planting delays.",
    "Side-letter diplomacy and selective resumption."
  ],
  "loading": [
    {
      "dimension": "Hard",
      "domain": "critical-technology",
      "load": "High",
      "channel": "chips, tools, materials for electronics and defence"
    },
    {
      "dimension": "Hard",
      "domain": "defence-security",
      "load": "Medium",
      "channel": "munitions and platform components"
    },
    {
      "dimension": "Hard",
      "domain": "strategic-infrastructure",
      "load": "Low",
      "channel": "grid and transport components"
    },
    {
      "dimension": "Soft",
      "domain": "government-effectiveness",
      "load": "High",
      "channel": "supply-chain visibility, stockpile policy, licensing diplomacy"
    },
    {
      "dimension": "Soft",
      "domain": "human-capital",
      "load": "Medium",
      "channel": "medicines and health outcomes"
    },
    {
      "dimension": "Soft",
      "domain": "influence-cohesion",
      "load": "Low",
      "channel": "public trust in government competence"
    },
    {
      "dimension": "Economic",
      "domain": "industry-trade-supply",
      "load": "High",
      "channel": "stoppages, substitution cost"
    },
    {
      "dimension": "Economic",
      "domain": "macro-financial",
      "load": "Low",
      "channel": "sectoral output and inflation"
    },
    {
      "dimension": "Economic",
      "domain": "energy-resources",
      "load": "Medium",
      "channel": "transition materials; fertiliser and food"
    }
  ],
  "stakeholders": {
    "government": {
      "exposure": null,
      "actions": [
        "Map tier-two dependence for the 20 most critical inputs",
        "Set stockpile grades, not just volumes",
        "Pre-qualify alternative suppliers"
      ],
      "watch": [
        "Licence approval times"
      ],
      "relevance": 4
    },
    "technology": {
      "exposure": null,
      "actions": [
        "Inventory bills of materials to the component level",
        "Dual-source where the supplier share exceeds 50 per cent"
      ],
      "watch": [
        "Export-control notices"
      ],
      "relevance": 3
    },
    "investors": {
      "exposure": null,
      "actions": [
        "Identify single-supplier exposure in portfolio companies"
      ],
      "watch": [
        "Lead-time indices"
      ],
      "relevance": 3
    },
    "public": {
      "exposure": "Medicine availability",
      "actions": [],
      "watch": [
        "Pharmacy shortage lists"
      ],
      "relevance": 2
    }
  },
  "regions": [
    {
      "region": "north-america",
      "exposure": "Medium",
      "rationale": null
    },
    {
      "region": "europe",
      "exposure": "High",
      "rationale": "Automotive, machinery, generic medicines"
    },
    {
      "region": "china",
      "exposure": "Low",
      "rationale": "Low as supplier, Medium as importer of tools"
    },
    {
      "region": "indo-pacific",
      "exposure": "High",
      "rationale": "Electronics assembly"
    },
    {
      "region": "south-asia",
      "exposure": "Medium",
      "rationale": "API intermediates, fertiliser"
    },
    {
      "region": "gulf-middle-east",
      "exposure": "Low",
      "rationale": null
    },
    {
      "region": "africa",
      "exposure": "High",
      "rationale": "Fertiliser, medicines, no stockpiles"
    },
    {
      "region": "latin-america",
      "exposure": "Medium",
      "rationale": null
    },
    {
      "region": "russia-eurasia",
      "exposure": "Medium",
      "rationale": null
    }
  ],
  "indicators": [
    {
      "name": "Export licence approval times and denial rates",
      "source": null,
      "threshold": null,
      "cadence": null
    },
    {
      "name": "Supplier concentration by HS code",
      "source": "UN Comtrade",
      "threshold": null,
      "cadence": null
    },
    {
      "name": "Lead-time indices",
      "source": "ISM, IHS",
      "threshold": null,
      "cadence": null
    },
    {
      "name": "Pharmacy shortage registers",
      "source": "EMA, FDA",
      "threshold": null,
      "cadence": null
    },
    {
      "name": "Fertiliser price indices",
      "source": "World Bank",
      "threshold": null,
      "cadence": null
    },
    {
      "name": "Announced capacity for alternative supply versus commissioning dates",
      "source": null,
      "threshold": null,
      "cadence": null
    }
  ],
  "compounds": {
    "triggers": [
      {
        "id": "S09",
        "note": "if energy equipment"
      },
      {
        "id": "S11",
        "note": "if fertiliser"
      },
      {
        "id": "S12",
        "note": "if grid components"
      }
    ],
    "triggered_by": [
      {
        "id": "S01",
        "note": null
      },
      {
        "id": "S05",
        "note": null
      },
      {
        "id": "S06",
        "note": null
      }
    ],
    "amplified_by": [],
    "triggered_by_other": [],
    "amplifying_trends": [
      "supply-chain concentration",
      "just-in-time inventories",
      "energy-transition material demand"
    ]
  },
  "open_questions": [
    "Whether cloud compute and frontier models belong here or in S13.",
    "How to treat 'friendly' supplier concentration (lithography tools) versus adversarial."
  ],
  "commentary": null,
  "overview": {
    "source": "ginc-desk-v0.2",
    "lenses": {
      "political": "The supplier offers to resume exports to governments that sign **side-letters** on unrelated matters, and several do.",
      "economic": "**Lines stop within weeks**. Alternative sources are already contracted by larger buyers at twice the price; substitution takes 18 to 36 months.",
      "social": "Hospitals and farms discover their exposure through **failed tenders** and missed planting, not through audits.",
      "technological": "Legacy chips, magnets and tools stop flowing. Eighteen months in, new refineries and plants are announced and **none is running**.",
      "legal": "A licence regime announced as 'orderly' backs up. Approval turns on **end-use declarations** no supplier can honestly complete.",
      "environmental": "Transition materials and **fertiliser** are among the inputs cut, carrying the shock into energy and food."
    },
    "regions": {
      "north-america": "Manufacturers wait on licensed inputs. Governments find they cannot see the **second and third tiers** of their own supply chains.",
      "europe": "Automotive, machinery and generic medicines. A parts maker stops shipping and the **assembly plant runs out on day nine**.",
      "china": "The supplier in most variants; an importer where the input is **lithography tools**.",
      "indo-pacific": "**Electronics assembly** stalls as components and materials are licensed shipment by shipment.",
      "south-asia": "Generics makers lose their **intermediates** when a supplier's export permit goes; fertiliser buyers are outbid.",
      "gulf-middle-east": "Little industry depends on the affected inputs; **exposure is low**.",
      "africa": "Fertiliser and medicines with **no stockpiles**. A hospital pharmacy learns of the cut-off when its tender fails.",
      "latin-america": "Industry and agriculture compete for **alternative supply** against larger buyers.",
      "russia-eurasia": "Importers of the affected inputs queue behind larger buyers for **alternative supply**."
    }
  },
  "history": [
    {
      "edition": 2027,
      "rank": 3,
      "L2y": 5,
      "L10y": 5,
      "impact_systemic": 3,
      "impact_national": 4,
      "confidence": "high"
    }
  ],
  "changelog": [
    {
      "version": "0.2.0",
      "date": "2026-10-02",
      "change": "Entered the Library at v0.2 with GINC desk scores."
    }
  ],
  "citation": "GINC (2027). Scenario S02 Single-supplier cut-off, Scenario Library v0.2. scenarios.ginc.org/library/single-supplier-cut-off"
}