Financial Stress Propagation In Semiconductors Supply Networks
- 2 days ago
- 2 min read
Updated: 1 day ago
When one firm controls a tool the entire industry depends on, financial trouble stops being a private matter. In a supply chain as concentrated as semiconductors, a single distressed node doesn't fail quietly — its stress travels, and firms with no direct relationship to the original shock end up paying for it. Understanding that propagation is the difference between assessing risk and actually seeing it.
The concentration is the whole story. Advanced chip production depends on a handful of irreplaceable suppliers: lithography equipment from the Netherlands, photoresists from Japan, silicon wafers from Taiwan — each with little substitutability at its stage. When COVID-19 and successive export-control escalations hit, that concentration turned localized disruptions into systemic ones, cascading into automotive, defence, and consumer electronics. Semiconductors are the foundational input of the digital economy, which makes them the clearest case study in supply-chain fragility we have.
Our report, Financial Stress Propagation in Semiconductor Supply Networks, builds a model of that fragility. We selected 70 firms spanning the full value chain, measured each one's financial stress using the Altman Z′′-Score, and represented inter-firm relationships as a directed weighted network in which a shock at one firm propagates over discrete rounds — its transmission governed by relationship strength, the centrality of the source, and the vulnerability of the receiver.
What emerges is a picture firm-level analysis cannot produce. An idiosyncratic shock to ASML — the sole provider of EUV lithography machines — concentrates its heaviest impact on Intel and TSMC, its two largest customers. A sector-wide DRAM and NAND shortage turns almost the entire network red, sparing only firms like Disco and AGC, which produce the enabling technology rather than the memory itself. A geopolitical shock from U.S. export restrictions lands hardest on Applied Materials, which sits at the precise intersection of American technology and Chinese manufacturing.
The conclusion is that financial risk in semiconductor supply chains cannot be assessed at the individual level alone. Network position is decisive: a financially healthy firm in an exposed position can carry more systemic risk than a weaker firm in a sheltered one. The findings are delivered through an interactive dashboard that lets users trigger economic, sector-specific, and geopolitical shocks and watch stress spread in real time — turning a static balance-sheet question into a live map of where the next crisis would actually travel.
The Bocconi Students Fintech Society chose semiconductors as the lens for this report because no other industry converts concentration into systemic risk as directly. When one node moves, the whole network feels it — and modeling that movement is the only way to know who is truly exposed before the shock arrives.
Research Report
Read the Research Report below ⬇️
Dashboard : https://bsfs-supply-chain.streamlit.app
Published in June 2026
Project Team
Project Leader: Mea Railo Finance Lead: Levente Faludi-Országh Analysts: Petar Abramovic, Filip Hruska, Adam Lugossy, Arthur Morvan, Deniz Utuk
Association Board :
Neil Maaouni (President & Head of Data Analysis), Mathilde Castagine (Vice President & Head of Events), Guillaume Abaz (Senior Advisor to the board), Andrea Botero (Head of M&A and VC), Antonina Bojanowska (Head of Generalist), Noé Wierzba (Head of Operations), Lucas Médina (Head of Corporate Analysis) , Alexandra Minca (Head of Communication)
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