China as shown by Huawei has the capacity to design state of the art chips, and they certainly have the brains. Morris Chang did a lot of his work at Texas Instruments before running TSMC (Taiwan Semiconductor Manufacturing Company). Jensen Huang runs NVIDIA. In retirement, I pass the time by reading 5 journals (Cell, Nature, Neuron, Science, PNAS), whose interesting material I report on in this blog. You will not find a single issue without at least one high quality, state of the art article from mainland China. These articles were not chosen by affirmative action.
So we beat Russia because they could steal and copy our chips, but could not manufacture them.
China certainly has tried to steal our manufacturing expertise — this is detailed pp. 306 – 310 with a Chinese company called Jinhua which stole manufacturing details (translation: hard won knowhow from years of experimentation) from the only American company (Micron) making memory chips. After much argumentation between National Security types and Treasury in the Trump administration, the US banned export by US firms to Jinhua of chipmaking tools, and Jinhua stopped making them in a few months.
Xi realizes just how dependent China is on machinery and software produced elsewhere, but replicating it in country is nearly impossible given its price and political meddling (see next paragraph).
The factory making chips is called a fab (for fabrication plant). China certainly tried with something called SMIC, but the politicians that controlled them meddled incessantly in business decisions. Every governor wanted a chip fab in his province, so China wound up with an inefficient collection of small facilities spread across the country (p. 251).
The book contains a blow by blow description of how the USA lost the ability to make the most advanced fabrication facilities and most advanced lithography machines — needed by the fabs. It’s too painful to recount here.
So our (fragile) lead on China depends on manufacturing prowess, as well as the brains we import and integrate from all over the world.
I suggest you read Miller’s book, even if you’re not a techie. Your future may depend on it
Chemiotics II 