Everyone's talking about the US chip ban. But the real restrictions were imposed by China.

I'll tell you about a component.

You've probably never heard of it.

It's in your phone's touchscreen. It's in satellite communications. It's in fiber optic cables.

It's in AI data centers, in the components that allow thousands of chips to communicate with each other.

Without that component, chips can work individually, but not together.

Approximately 70% of its production is in China.

This component is called indium.

Indium isn't mined on its own.

It's obtained as a byproduct when processing zinc ore. So, if you want to increase indium production, it's not enough to just look for more indium; you need to refine more zinc.

That's why it can't be accelerated by simply paying for it.

First, you need to grow another industry, and a large part of that industry is in China.

So what exactly does this component do in artificial intelligence?

Everyone is measuring the competition by chips. How many chips does each company have? How many parameters was used to train each model?

However, a data center isn't just a stack of chips.

When training a large model, thousands of chips are working simultaneously, constantly sending data to each other.

So those thousands of chips have to act like a single machine.

Within the same rack, chips communicate via copper wires. But as the cluster grows, data between racks is transmitted by light.

The lasers that produce that light are based on indium phosphide.

Adding chips doesn't change the outcome if the connection slows down, because the system operates at the speed of the slowest link.

China restricted exports of this material in February 2025.

In the following 14 months, China's indium exports globally fell by two-thirds, and to the US by 77 percent. The price of indium phosphide flakes rose from approximately $1,400 to $5,000.

The result can be seen in one company.

Lumentum, the American company that produces these connectors, quadrupled its production. Despite this, it has no stock left to sell until 2028.

Not because demand is high. Because it couldn't find raw materials.

To solve this bottleneck, Nvidia committed $2 billion each to Lumentum and its competitor Coherent. Lumentum is building a new facility in the US, and production will begin in mid-2028.

So, the world's most valuable chip company wrote checks to two suppliers to solve a material shortage, and the solution will begin at the earliest in two years.

Why isn't this being discussed?

Because chips are quantifiable. They have a brand, a price, and a market value. The number of chips a company buys becomes news.

The interconnect layer isn't visible. Nobody discloses how many optical modules they buy.

So the public is measuring the competition with the wrong unit.

When China imposed restrictions on rare earth elements, this was discussed, and counter-policies were developed.

The same move was made with indium, and it was hardly discussed.

It's the same weapon used without much fanfare.

Now let's return to the initial picture.

The US chip bans prevented China from accessing advanced AI chips, and this has largely worked.

But the two restrictions aren't preventing the same thing.

One stopped the chip itself. The other stopped the chips from working together.

Making a chip and making thousands of chips work together as a single machine are two separate tasks. In the first, China lags behind; in the second, it holds the gate.

Moreover, this isn't the only bottleneck.

When building a data center, it needs to be connected to electricity before the chip. Transformers make that connection.

China has approximately 60% of the global transformer production capacity. The US only meets about 20% of its own demand.

Orders for large power transformers can take up to 4 years. A data center, on the other hand, is a project planned to be built in 18 months.

Why is China accumulating gold? The answer lies in US factories.

When people say China is buying gold, many make the same interpretation: China is exiting the dollar.

That's true, but incomplete.

Because the US is doing something else at the same time: bringing production back to its own country.

These aren't separate decisions; they're two sides of the same equation.

Read carefully.

For 40 years, the system was simple. The US outsourced cheap labor to China. China produced, earned, and used that money to buy US bonds.

Both sides were happy.

Then 2022 arrived.

In February, approximately $300 billion of Russia's assets became unusable within days.

The money remained unused. Only the authorization to use it had been revoked.

All countries learned the same lesson.

The money you keep abroad. The raw materials you acquire. The factories you build. The payment systems you're connected to. A substance inside a chip.

In normal times, it's all trade. When tensions arise, they all become leverage in the hands of the other side.

From that day forward, both countries looked at their own weak points.

First, China.

China was the world's largest producer. But it was holding the money it earned in another country's bonds.

That's why it's quietly building its own system.

In 2023, the central banks of China and Saudi Arabia signed a swap agreement.

That same year, Brazil and China decided to conduct trade using their own currencies instead of the dollar.

BRICS expanded. China established its own payment system as an alternative to SWIFT.

For years, China has been reducing its stock of US Treasury bonds and buying gold with that money.

But gold is the smallest part of this story.

Gold remains in the vault. What China is really doing is converting paper money into physical assets.

China is building the Belt and Road Initiative for this purpose.

Railways, dams, and power plants in Africa. Ports acquired in Europe and Africa. The operating rights for the Port of Piraeus in Greece. A port in Sri Lanka transferred for 99 years.

And then there are the strategic partnerships. Iran, Russia, Venezuela, Cuba.

Now, the US.

The US's weakness wasn't money. It was production.

For 40 years, the US moved production to other countries because it was cheaper. Now it sees that a large part of that production is in the hands of its competitors.

So it's doing two things at once.

First, bringing production back home.

The US has made it expensive to produce abroad and sell domestically.

The government is also directly acquiring stakes in companies in strategic sectors. It acquired 10% of Intel and became its largest shareholder. In the rare earth sector, it acquired 15% of MP Materials and again became its largest shareholder.

Second, establishing a supply chain without China.

A critical mineral agreement was signed with Australia in October 2025.

In the same month, a rare earth agreement was made with Japan. A US-backed fund was launched for mining investment in Ukraine. In February of this year, a separate trade bloc for critical minerals was proposed.

So, the US is also forming alliances.

So why has all this accelerated?

The CIA director shared intelligence information in a speech.

According to this information, Xi Jinping ordered his military to be prepared to take Taiwan by 2027.

A distinction is necessary here.

A preparedness order does not mean a decision to invade.

But the same director also said something else.

He stated that Xi is disturbed by what is happening in Ukraine and has learned from Russia's mistakes.

Now look at the news again.

Tensions in Iran. Operation in Venezuela. Sanctions against Russia. Pressure on Cuba.

A mining deal. The purchase of a port. A chip ban. A central bank buying gold.

They all appear in separate headlines. They seem like separate events.

I don't see separate events. I see one single event.

The US and China.