During hyper-globalization, you could pick and choose: military alignment with the US, economic integration with China, financial ties with Europe, tech partnerships wherever optimal. Now it’s bundled. If you pick one domain, you increasingly get locked into that bloc across all domains.
The ASML case illustrates this perfectly: if you want to remain in the US tech ecosphere and under the US defense umbrella, you comply with technology export restrictions to China. You can’t have US security guarantees while selling cutting-edge lithography equipment to Chinese chipmakers.
The unbundling that enabled hyper-globalization is reversing. Hedging is dying. Bundling is back.
What This Means Practically
During the unbundled era, a European company could:
– Rely on US military protection
– Source manufacturing from China
– Access capital from London and New York
– Partner with whoever offered the best technology
In the bundled era, these choices become linked. Tech alignment follows security alignment. Financial access follows political alignment. Manufacturing location signals bloc membership.
The Corporate Dilemma
Companies that built strategies around arbitraging between blocs face a reckoning. The arbitrage opportunities are closing as alignment in one domain forces alignment in others.
The strategic question isn’t “how do we optimize across both blocs?” It’s increasingly “which bloc are we in, and how do we maximize within that constraint?”
Key Takeaway
As the Economics of Lithography shows, technology chokepoints are where bundling becomes visible. ASML can’t be neutral because its technology is too strategic.
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
