Taiwan’s Chips Are Still Too Strong: China Spends Billions, but Experts Say It Remains Hard to Catch Up

China is spending heavily to build its own semiconductor industry, but money alone has not closed the gap with Taiwan and other leading chip producers. The country still faces major obstacles in advanced chips, semiconductor equipment and manufacturing technology as Beijing tries to reduce its reliance on the United States and the West.

The contest has become especially intense around advanced semiconductors. Artificial intelligence has sharply increased demand for AI accelerators, which provide the computing power needed to train large models, run data centers and support digital industries. That has turned the chips into a central battleground in the U.S.-China technology rivalry.

Taiwan occupies a pivotal position in that struggle. Most of the world’s most advanced AI accelerators are made there, and historian Chris Miller, author of “Chip War,” estimates that Taiwan will produce more than 90% of global AI accelerators in 2026. Taiwan Semiconductor Manufacturing Co., or TSMC, has consequently become a major pillar of the AI industry and the digital economy.

Miller says China remains heavily dependent on technologies designed and produced by the United States, Europe, Taiwan, South Korea and other allies. Beijing has backed semiconductor self-reliance for more than a decade, with Huawei and Semiconductor Manufacturing International Corp., or SMIC, among the companies seen as important to that effort. China aims to cover the entire chain, from chip design and fabrication to manufacturing equipment.

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China remains highly dependent on technologies designed and manufactured by the United States, Europe, Taiwan, South Korea and other allies.

Yet advanced production requires more than large investments. Materials, equipment, patents, skilled workers, testing, production experience and stable supply networks take years to develop. SMIC has made technological progress, but still trails TSMC in leading-edge capabilities and production scale. Miller also points to ASML’s dominance in advanced lithography, particularly extreme ultraviolet equipment, and says producing a small number of machines is not the same as operating them reliably and mass-producing chips.

The United States has tightened controls on advanced chips and semiconductor equipment that could support military applications or large-scale AI training. The effectiveness of those restrictions remains contested. Some industry figures, including Nvidia chief executive Jensen Huang, argue that cutting China off from the market could encourage domestic substitutes. Miller says China’s push for technological self-reliance began before the controls, while reports of chip smuggling and access to advanced computing through overseas cloud services suggest that some Chinese companies may still reach U.S. technology through other channels.

TSMC is expanding in the United States, including at a plant in Arizona, and plans to increase its American investment over the next decade. Samsung and Intel are also competing for AI chip orders. Even so, the article argues that Taiwan’s position in advanced semiconductor production will be difficult to replace in the short term. The chip battle is no longer only a commercial contest. It increasingly involves national security, technological power and geopolitics.

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It is not enough simply to spend money to catch up.