Three years after the Biden administration imposed sweeping export controls on advanced semiconductors destined for China, Beijing’s response has crystallized into something Washington did not fully anticipate: not defeat, but adaptation. China’s domestic chip industry — once a distant also-ran — is producing results that are challenging comfortable assumptions about the effectiveness of technology sanctions.
Huawei’s Kirin 9010 processor, manufactured by SMIC using domestically developed 7-nanometer-equivalent processes, has powered a comeback for the company that American officials had pronounced commercially dead. The chip is not as efficient as those produced by TSMC or Samsung at equivalent nodes, but it is functional, commercially viable, and manufactured entirely within China’s borders — a significant milestone that the export controls were designed to prevent.
The United States has responded by tightening restrictions further, adding new entities to export control lists and working with allies — particularly the Netherlands and Japan, home to ASML and Tokyo Electron respectively — to limit China’s access to the chipmaking equipment needed to close the remaining technology gap. The latest restrictions target not just chips themselves but the software and chemical inputs required to manufacture them.
We underestimated China’s capacity to innovate under pressure. That’s not a comfortable admission, but it’s an accurate one. The controls have slowed them — they have not stopped them.
— Former Commerce Department official, speaking anonymously
The cybersecurity dimensions of the chip war extend beyond commercial competition. Defense and intelligence analysts have raised concerns about the potential for backdoors or vulnerabilities in Chinese-manufactured chips if they find their way into critical infrastructure or supply chains. The Biden and Trump administrations both identified semiconductor supply chain security as a national security priority, and substantial funding has flowed to domestic production through the CHIPS Act.
TSMC’s Arizona fabs, Intel’s Ohio expansion, and Samsung’s Texas plant represent America’s bet on reshoring critical manufacturing. But they also illustrate the challenge: building a leading-edge semiconductor facility takes five to seven years and tens of billions of dollars. The race is not purely technological — it is also a race against time and capital.
The chip war is entering a new phase, one defined less by whether sanctions work in theory and more by whether they work fast enough to matter in practice.
The gap between China’s current capabilities and the global frontier is narrowing — slowly, but measurably. That narrowing is among the most consequential technological developments of our time.
