Where has China’s push for chip self-reliance taken it?
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By Alice Li
China’s push for chip self-sufficiency has spurred rapid growth, but it still lags behind established global manufacturing leaders
The rapid expansion of artificial intelligence (AI) is reshaping global demand for semiconductors, bringing renewed attention to the chip supply chain, which has long been dominated by Korean and Western firms.
Signs of change are rippling through the chip market. China, driven by massive domestic demand and betting on technological innovation to fuel future economic growth, has been stepping up efforts to achieve chip self-sufficiency and cut dependence on foreign suppliers.
This explainer examines China’s progress across the semiconductor value chain, the breakthroughs achieved and the gaps that remain, placing them in context through comparisons with global leaders such as South Korea, and looks at Beijing’s next steps to push the sector forward.
How far has China come?
China’s semiconductor industry has expanded rapidly in recent years. Output reached a record 484.3 billion units last year, up 85.2 percent from 2020, according to China's Ministry of Industry and Information Technology.
Under its 14th Five-Year Plan, which set the economic blueprint for the country during the 2020-25 period, Beijing vowed to raise semiconductor self-reliance to at least 70 percent by 2025, a goal that has gained urgency amid tightening U.S. export controls. While China has not disclosed official self-sufficiency figures, Goldman Sachs estimated last year that domestic suppliers met about 14 percent of China’s semiconductor demand by value in 2024, and expects it to rise to around 37 percent by 2030.
Progress has also been seen upstream. The domestic share of semiconductor manufacturing equipment, which has long been dominated by foreign suppliers, rose to 19.92 percent in 2023 from 4.91 percent in 2018, according to estimates by China Securities.
Chinese companies are also seeking to narrow the technology gap with global leaders. Moore Threads, hailed as “China’s Nvidia”, said late last year that its latest Huashan AI chip has a performance better than Nvidia’s Hopper architecture and comes close to the U.S. tech firm’s newer Blackwell line.
Chinese dynamic random-access memory (DRAM) maker Changxin Memory Technology unveiled its Double Data Rate 5 (DDR5) DRAM products in November, featuring higher frequencies and larger capacity — key requirements for advanced AI servers — marking its entry into advanced DRAM, a segment long led by Korea’s Samsung Electronics and SK hynix.
A mockup of a chipset featuring Samsung Electronics’ high-bandwidth memory technology on display at the 2025 Semiconductor Exhibition in Seoul. AFP-Yonhap
Where does China still trail global giants?
Despite notable progress in recent years, Chinese companies still lag behind Korean and Western rivals in both production capacity and technological maturity.
One key bottleneck lies in extreme ultraviolet (EUV) machines used for chips at the 3-nanometer and lower process nodes, which are advanced categories. The segment is monopolized by Dutch firm ASML, which has been barred from supplying its most advanced machines to China under U.S.-led export controls.
China has built a prototype of the EUV machine in a “high-security” laboratory in the tech hub of Shenzhen, created by a team of former engineers from the Dutch semiconductor giant who reverse-engineered the company's machines and built with parts from older ASML machines found on secondary markets, according to a Reuters report in December.
Beijing has not commented on the issue, but according to the report, the Chinese government is aiming to produce working chips on the prototype by 2028.
Another area where Chinese firms still lag in both production capacity and technological sophistication are high-bandwidth memory (HBM) chips. These are essential for running AI reasoning models and have long been dominated by Samsung Electronics and SK hynix, as well as U.S.-based Micron Technology.
China’s CXMT plans to begin mass production of HBM3 in the first half of this year, using packaging technology similar to that of SK hynix, which has already moved on to more advanced HBM4, according to a December note by Guoyuan Securities.
What is Beijing's next step?
China shows no sign of scaling back its push in semiconductors in the coming years. The proposal for the country’s 15th Five-Year Plan covering the 2025-30 period explicitly calls for the adoption of “extraordinary” measures to promote progress across the entire supply chain, including integrated circuits and high-end equipment, with the goal of “decisive breakthroughs."
China is pooling investments in semiconductor manufacturing under a state-backed semiconductor investment vehicle established in 2024, which has a planned capital of $47.5 billion, according to a research note by CMB International Securities — larger than the $39 billion in fiscal subsidies earmarked by the United States as semiconductors incentives under its CHIPS Act.
With increasing risk in relying on overseas suppliers thanks to geopolitical tensions, China’s AI chip ecosystem is evolving into a multi-supplier landscape, with both established technology groups such as Huawei and younger chipmakers like Moore Threads and Biren Technology advancing their own solutions, according to CMB.
“Policy support, coupled with strong domestic demand, is accelerating technological progress and import substitution, while structurally expanding China’s domestic semiconductor market,” the note said.
Alice Li is a reporter with the South China Morning Post. She is currently based in Seoul, writing for both The Korea Times and the South China Morning Post under an exchange program.