Chinese Big Tech isn’t really known for innovation

Innovation under Pressure: China’s Semiconductor Industry at a Crossroads

For the first time among those watching these issues closely, the technological “choke point” strategy adopted by U.S. authorities across the late 2010s and early 2020s has now been shown to have failed, as Chinese government and R&D officials, as well as key state-backed and private sector firms, have been able to respond to the challenge forcefully and effectively. Leading the response are key policymakers: Vice Premier Ding Xuexiang, and the semiconductor team at the National Development and Reform Commission (NDRC), overseen by Vice Minister Xiangli Bin. A new AI-focused group at the NDRC overseen by Vice Minister Huang Ru is also increasingly important, as semiconductor and AI-related industry policies increasingly dovetail.

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Leading domestic foundry SMIC, for example, has faced pressure to manufacture Huawei’s most advanced chip designs by stretching existing foreign equipment to its limits. This includes deep ultraviolet (DUV) lithography systems supplied by the Dutch firm ASML, which are being pushed beyond their intended capabilities, often resulting in low and inconsistent yields. The urgency stems from Huawei’s need for system-on-chip (SoC) processors for its consumer devices—especially smartphones, as well as for advanced AI chips in its Ascend 9XX series.

Remind me, again. Who else was experimenting with deep ultraviolet (DUV) lithography at scale prior to 2024? Who else was a front-runner in developing and deploying system-on-a-chip or AI embedding?

That’s before you get into the EV sector, SMRs for bulk shipping, or the Chinese airplane and aerospace development.

India, Korea, and Japan have all been in a scramble to keep up with the Chinese industrial programs. Meanwhile the US/EU don’t even seem to bother trying.