Semiconductors are one of the U.S. and China’s fiercest battlegrounds. Chips are the lifeblood of the modern economy, powering everything from iPhones to fighter jets. They are also critical to unlocking future technological breakthroughs. It means tomorrow’s global balance of power could rest on wafer-thin chips developed today.

Taiwan is the source of 90% of global high-end chips. Like other major economies, China relies heavily on Taiwan’s semiconductor production. And it wants to be chip-independent with various ambitious projects. 

Li Fang is a Chinese doctor. He was the general manager of the Technology Development Department of Lenovo Group—a Chinese multinational technology company. He now consults for private-screen businesses and is a long-time observer of China’s tech industry.

China’s semiconductor circle wants to overtake the field despite the U.S. containment policy. But Li Fang is pessimistic. He said the semiconductor manufacturing process is too complex, and China is at a disadvantage. For example, two chip giants TSMC from Taiwan and SMIC from China were founded around the same time. But TSMC from Taiwan has achieved the most advanced process of 3 nanometers or even 1 nanometer, while SMIC from China has stayed at the mid-level process of 14 nanometers. Since technology accumulation takes time, it is impossible to catch up quickly.

The former Lenovo general manager said that if China wants a comprehensive breakthrough in this area, it will take 20 to 30 years.

In 2015, China set up a Made in China 2025 strategy. China wants to be 70% self-sufficient in high-tech industries. By 2049, it wants to take over and become the dominant force in global markets.

Liu Peizhen is a researcher at the Taiwan Economic Research Institute in Taipei. 

She said that the Made-in-China-2025 goal is unachievable. Last year, its self-sufficiency rate was likely less than 17%. So it’s hard to see China approaching anywhere close to 70% by 2025.

The U.S. has placed limits on Chinese semiconductors through policy after policy. 

According to the “Chip and Science Act,” it would be illegal for companies to get subsidies from the U.S. and, at the same time, get investment money from China or other countries that aren’t friendly to the U.S. for at least 10 years. 

In late September, the U.S., Japan, South Korea, and Taiwan met at Chip4 to talk about improving the semiconductors’ supply chain.
Earlier this week, the U.S. was getting ready to put in place sweeping export controls to make it harder for China to get semiconductors and equipment for making chips for supercomputers and other military uses.

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