China has expanded its semiconductor capacity, particularly for foundational and mature chips, but that does not mean it has caught up in advanced fabrication or chipmaking equipment. The evidence in this article’s source set shows a strategy aimed at supply-chain resilience, security, technology leadership and exports, while U.S. controls target access to specified advanced chips and related supply-chain activity.
What China’s semiconductor strategy seeks
China’s semiconductor policy is about more than replacing imported chips. The Federal Reserve describes goals that include strengthening supply-chain resilience, reducing foreign technology in critical infrastructure and defense, leading in technologies that could raise productivity, and expanding exports. Domestic chipmaking is fundamental to these aims. Made in China 2025 set a high self-sufficiency goal across frontier sectors, including information technology.
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Self-sufficiency is not one measure. Wafer capacity, actual production, advanced-process capability, domestic sourcing, chipmaking equipment and packaging are distinct parts of the supply chain. Progress in one does not establish leadership in all the others.
What the evidence says about China’s progress
The Federal Reserve’s January 2025 analysis reports that China’s wafer-processing capacity had grown substantially, but production remained concentrated in legacy chips. In the capacity data through 2023:Q3 analyzed by the Federal Reserve, China had essentially no high-end production capacity. The note defines legacy chips as 28 nm and above, advanced chips as 6–27 nm, and cutting-edge chips as 5 nm and below.
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The U.S.-China Economic and Security Review Commission (USCC) reports that China-based firms’ share of global foundational-node logic wafer capacity rose from 19% in 2015 to 33% in 2023. That is a measure of capacity in a particular chip segment, not a measure of all chips China uses or proof of advanced-node competitiveness.
| Measure | Finding | What it does—and does not—show |
|---|---|---|
| Foundational-node logic wafer capacity | China-based firms held 33% of global capacity in 2023, up from 19% in 2015. | Shows growth in this segment’s capacity; it is not a measure of advanced-chip leadership. |
| Domestic supply of 20–14 nm chipmaking equipment | China-based equipment makers met 9.6% of domestic demand in 2023. | Shows that equipment localization remained limited in this range. |
| Legacy and high-end production capacity | The Federal Reserve’s data through 2023:Q3 show production concentrated in legacy chips and essentially no high-end capacity. | Describes the data analyzed in the January 2025 note, not a current 2026 snapshot. |
China also missed its target of sourcing half of domestic-industry chip use from local suppliers by 2020, according to the USCC. A forecast in the commission’s 2025 assessment about possible local sourcing by the end of 2025 should not be treated as a confirmed result here.
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How the U.S. response works
On January 15, 2025, the U.S. Commerce Department’s Bureau of Industry and Security (BIS) announced rules updating controls on advanced computing semiconductors. The package also added due-diligence requirements for foundry and packaging exports in specified situations and added 16 entities to the Entity List. BIS said the measures were intended to limit diversion and restrict access to high-end chips relevant to military applications. This announcement describes the rules and the government’s stated rationale; the cited sources do not establish their overall effectiveness.
China’s Ministry of Commerce (MOFCOM), responding to the launch of an anti-discrimination investigation into U.S. measures targeting China’s integrated-circuit sector, called those measures restrictive and harmful to global semiconductor supply-chain stability. That is the Chinese government’s position, not an independent finding. MOFCOM said the investigation would proceed under Chinese foreign-trade law and that responsive measures could follow actual circumstances.
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| Policy approach | Instrument described in the sources | Stated rationale or position |
|---|---|---|
| China | Directed investment and industrial support for domestic capabilities; an anti-discrimination investigation. | China presents U.S. measures as restrictive and harmful to supply-chain stability. |
| United States | Advanced-chip controls, specified foundry and packaging due diligence, and Entity List additions. | BIS cites national-security and diversion risks. |
How to read the competition
China’s larger presence in foundational-chip capacity is meaningful, but capacity is not the same as production, advanced-process know-how, or locally made equipment. Similarly, export controls are a policy tool with a stated rationale; the sources cited here do not quantify their effectiveness. Keep the comparison tied to the chip segment, supply-chain stage, metric and date being discussed.
The available evidence here is mainly from data through 2023 and publications in 2025. It does not provide a directly comparable, independently verified snapshot of China’s exact semiconductor capacity and policy position as of October 2026.
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Sources
- Federal Reserve Board, “Developments in Chinese Chipmaking”, January 17, 2025.
- U.S.-China Economic and Security Review Commission, “Made in China 2025: Evaluating China’s Performance”, 2025.
- Bureau of Industry and Security, announcement of advanced-computing semiconductor restrictions, January 15, 2025.
- China Ministry of Commerce, remarks on its anti-discrimination investigation, September 14, 2025.
FAQ
Is China a leader in advanced semiconductor manufacturing?
The evidence cited here does not establish that. The Federal Reserve’s capacity data through 2023:Q3 show China’s production concentrated in legacy chips and essentially no high-end production capacity. China’s 33% share in the USCC figure refers specifically to global foundational-node logic wafer capacity in 2023.
What do U.S. semiconductor controls seek to limit?
BIS says its January 2025 rules update controls on advanced computing semiconductors, add due-diligence requirements for certain foundry and packaging exports, and address diversion and national-security risks. The cited sources do not measure the rules’ overall effectiveness.
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Does growth in chipmaking capacity mean China is self-sufficient?
No. Capacity, actual production, domestic sourcing, advanced-chip capability and manufacturing equipment are separate measures. For example, the USCC reports that China-based equipment makers met 9.6% of domestic demand for 20–14 nm chipmaking equipment in 2023.
What does China say about U.S. restrictions?
MOFCOM calls the measures restrictive and says they harm supply-chain stability. This is the Chinese government’s stated position, rather than an independent assessment.
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