Serenity, the stock-picker who tracks the obscure upstream suppliers feeding the AI buildout, spent Thursday largely on geopolitics — specifically the rare-earth and materials fight between the US and China, which sits directly beneath his supply-chain thesis.

Rare earths and the Japan signal. Reacting to reports that China has halted some rare-earth shipments to the US, Serenity argued the more telling indicator is Japan, whose imports of gallium, dysprosium, terbium and yttrium from China reportedly fell to zero in June. His read: China is choking off *feedstock* to Japan, which in turn feeds US supply chains — a more surgical form of leverage than a blanket ban. He tied this directly to his photonics longs. AXTI (AXT Inc.) makes indium-phosphide (InP) substrates — the compound-semiconductor base for the high-speed lasers used in optical interconnects — and depends on indium supplied via Japanese firms like Sumitomo. Those substrates ultimately flow to LITE (Lumentum), the large-cap optical incumbent he holds as the "safe" anchor of his photonics sleeve. Disruptions to that AXTI-to-LITE pipeline, he noted, are exactly the kind of pressure point China can toggle on and off. He also flagged LYC.AX (Lynas, an Australian rare-earth miner outside his usual coverage) as an increasingly important non-China source, noting Japan has locked up much of its heavy rare-earth output.

Mapping the chokepoints. In a longer piece, Serenity laid out where the world's semiconductor monopolies actually sit — the heart of his "buy what's upstream" framework. He grouped European bottlenecks (ASML, the sole maker of EUV lithography machines; SOI, or Soitec, his near-monopoly silicon-on-insulator substrate supplier for co-packaged optics), Japanese near-monopolies in photoresist, EUV mask blanks and packaging film, and allied capacity in Taiwan (TSM, the foundry he holds as his central AI anchor) and Korean memory (SKHY, SK Hynix). Against that he set US strengths in design tools and equipment — LCRX (Lam Research) and KLA in etch and metrology, plus NVDA downstream. His conclusion: the US and China are in an unspoken race to reach supply-chain independence first, and Washington was slow to prioritize rare earths.

A lighter aside on tokenization. Serenity relayed that Korean retail investors appear to favor HOOD (Robinhood) over the AMC (AMC Entertainment) CEO in an ongoing debate over stock tokenization, quipping that the appeal of highly leveraged access to Samsung and SK Hynix shares is winning the argument. HOOD is a position he has grown more mixed on, but here he cited it only as a market-color anecdote.

The demand backdrop. Finally, Serenity restated the demand case underpinning everything: NVDA guiding to supply-constrained growth (which he suggests would be far higher unconstrained), AVGO (Broadcom) projecting AI revenue climbing toward $230B over two years, and hyperscalers MSFT, GOOGL and AMZN all signaling compute shortages into next year — with Nvidia flagging roughly $1.3T of 2027 spend. That flood of capex, he argues, flows straight into the upstream materials and laser chokepoints the day's geopolitical news just put back in the spotlight.

*Derived commentary, not advice.*