Why Relationship Size Alone Can Mislead Supply-Chain Research
August 2, 2026
Altsets
Research by Altsets Research
Compare relationship size with supplier revenue percentage and customer cost percentage to separate absolute scale from relative economic exposure.
Data used:Altsets Supply Chain Intelligence: 90k+ entities, 400k+ relationships, 20+ years of history.
Key findings
- Relationship size measures absolute economic scale while the two percentage metrics measure concentration against different company-specific denominators.
- SK Hynix to Apple is estimated at 6.2B USD but only 1.76% of Apple COGS, while KLA to Micron is 693M USD but 4.59% of KLA revenue.
- Ranking relationships by only one metric can hide economically meaningful exposure.
A large relationship value does not automatically mean a relationship is highly concentrated, and a smaller relationship value does not automatically mean it is unimportant. Supply-chain research becomes more useful when relationship size, supplier revenue percentage, and customer cost percentage are read together. Real Altsets examples make the distinction clear:
| Relationship | Relationship size | Supplier revenue percentage | Customer cost percentage |
|---|---|---|---|
| SK Hynix to Apple | 6.2B USD | 8.75% | 1.76% |
| LG Energy Solution to Tesla | 3.2B USD | 19.03% | 3.41% |
| Lam Research to Micron Technology | 1.2B USD | 5.61% | 5.52% |
| KLA to Micron Technology | 693M USD | 4.59% | 2.84% |
The point is not that one metric is better. Each answers a different question.
Relationship size measures absolute economic scale
Relationship size is useful because percentages can hide the dollar scale of a commercial connection. A relationship representing 10% of a small supplier's revenue can be economically smaller in absolute terms than a relationship representing 2% of a much larger company. The relationship size estimate adds a common monetary frame.
But dollar size alone creates its own blind spot. Companies have different revenue bases and cost structures. A 6B relationship can be enormous to one side and relatively modest to the other.
Supplier revenue percentage measures customer concentration
Supplier revenue percentage asks: How important does this customer appear to the supplier's revenue base?
The LG Energy Solution to Tesla relationship is estimated at 19.03% of LG Energy Solution revenue and 3.2B USD. The SK Hynix to Apple relationship is larger in absolute size at 6.2B USD, yet Apple is associated with 8.75% of SK Hynix revenue. So the larger dollar relationship is not the more concentrated supplier-side relationship in this comparison. That is exactly why ranking relationships only by estimated size can miss economically important concentration.
Customer cost percentage measures supplier materiality from the other side
Customer cost percentage asks a different question: How much of the customer's cost base is associated with this supplier relationship?
The SK Hynix to Apple relationship is estimated at 1.76% of Apple COGS despite its 6.2B USD relationship size. Lam Research to Micron is only 1.2B USD, but it is associated with 5.52% of Micron COGS. Again, the larger relationship value does not produce the larger relative customer exposure. The denominator changes the interpretation.
Why sub-billion relationships can still matter
The KLA to Micron relationship is estimated at 693M USD, 4.59% of KLA revenue, and 2.84% of Micron COGS. A screen sorted only by relationship size could push this edge below larger billion-dollar relationships.
The 4.59% supplier revenue estimate shows why that can be a mistake. Micron still represents a noticeable share of KLA's mapped revenue base. The smaller absolute relationship can remain relevant because relative exposure is measured against the size of the company.
Why multi-billion relationships can still be relatively small
The reverse pattern also matters. A multi-billion-dollar relationship attached to a very large customer can represent a relatively small share of that customer's total costs.
The SK Hynix to Apple relationship illustrates this directly. 6.2B USD is large in absolute terms, but the displayed Apple cost percentage is 1.76%.
That does not make the relationship unimportant. It changes what the relationship can support analytically. It may be economically meaningful to SK Hynix while representing a smaller share of Apple's total cost base.
A better relationship-ranking framework
Instead of asking for the "largest relationship," decide what kind of importance you actually mean. Use relationship size when you care about:
- absolute economic scale;
- approximate commercial magnitude;
- comparison of dollar-sized relationships.
Use supplier revenue percentage when you care about: customer concentration, customer read-through, and supplier sensitivity to customer demand. Use customer cost percentage when you care about: supplier materiality to the customer, disruption triage, and customer-side dependency research. Use all three together when you need to understand how the relationship looks from both sides.
What not to do with the percentages
Supplier revenue percentage and customer cost percentage use different denominators. They should not be combined into a universal "dependency ratio" without a clearly defined methodology.
A supplier-side 20% figure and a customer-side 5% figure do not mean the supplier is exactly four times more dependent. They mean the relationship occupies different shares of two different financial bases. The percentages are most useful when they retain their directional meaning.
A repeatable comparison process
For any relationship:
- Record the supplier and customer direction.
- Read relationship size as absolute scale.
- Read supplier revenue percentage as customer concentration for the supplier.
- Read customer cost percentage as supplier materiality for the customer.
- Note missing values rather than treating them as zero.
- Decide which metric matches the research question.
- Only then compare the relationship with peers or alternatives.
The KLA and Micron analysis shows why a sub-billion relationship can still be visible on the supplier side. The Tesla and LG Energy Solution analysis shows a strong supplier-side concentration imbalance. The SK Hynix, Nvidia, and Apple comparison shows how one supplier can have very different economic relationships with two customers.
For formal definitions, read the Altsets supply-chain data methodology. Browse Supply-Chain Data Use Cases for other ways to apply the metrics.