He Pengyu | School of Government, Peking University

Since the United States imposed chip export controls on China in 2018, the semiconductor technology war between the two nations has persisted for seven years. Remarkably, the Chinese semiconductor industry, which initially found itself at a profound disadvantage, did not collapse; instead, relying on its indigenous capabilities, it achieved a series of breakthroughs, with several prominent enterprises joining the vanguard of the global semiconductor industry.

How was such a monumental achievement realized? Current discussions tend to emphasize the roles of state policy support, massive investments in technology R&D, and the entrepreneurial struggle of Chinese firms. While these factors are undeniably important, they can only exert their effects by acting upon the industrial development process. Therefore, answering this question requires grounding our analysis in the shifting capabilities of China’s semiconductor industry and explaining why this capability transformation occurred during the technology war rather than prior to its outbreak.

Based on mainstream international innovation theories and relevant empirical evidence, this paper argues that the key to the counter-trend growth of China’s semiconductor industry lies in its strategic shift toward developing a localized industrial chain. This structural change has not only “activated” the foundational development bases of China’s semiconductor industry—which had been constrained for decades—but also forged a mode of industrial growth that supports indigenous technological progress, thereby driving an unprecedented surge in China’s semiconductor technological capabilities. As the balance of power between China and the US shifts, the overall landscape of the international semiconductor industry is also moving in a direction favorable to China. Therefore, only by adhering to the strategic direction of developing a localized semiconductor industrial chain can China completely break through US containment and genuinely create a global industrial paradigm conducive to its own technological advancement.

The Unique Foundation and Developmental Constraints of China’s Semiconductor Industry

In the rapidly evolving semiconductor industry, catch-up by latecomers is not uncommon. However, China’s development over the past few years has exhibited an unprecedented characteristic: rather than achieving isolated breakthroughs in specific nodes, it has realized comprehensive breakthroughs across all major nodes and product domains. For instance, in chip design, there are Huawei HiSilicon, Will Semiconductor, and Loongson Technology; in chip manufacturing, SMIC, Huahong Group, and Nexchip; in packaging and testing (OSAT), JCET, TFME, and Huatian Technology; in memory chips, CXMT and YMTC; and in the previously weak areas of materials, equipment, and Electronic Design Automation (EDA) software, companies like Naura, AMEC, ESWIN, Zingsemi, and Empyrean Technology. All these Chinese enterprises have made substantial progress during the technology war.

Crucially, the vast majority of these breakthrough enterprises were not established after the outbreak of the tech war; they existed prior to it. The peculiarity of this breakthrough modality reflects a unique developmental foundation of China’s semiconductor industry—despite lagging in overall technological levels, it has always maintained a fundamentally complete industrial layout. [1] From an international perspective, not only do Japan, South Korea, European nations, and Taiwan lack this kind of foundation, but even the United States today cannot achieve this (e.g., lacking lithography machine manufacturers and large silicon wafer companies). However, this raises a question: given its comprehensive foundational layout, why didn’t China’s semiconductor industry achieve across-the-board breakthroughs before the technology war?

This paper’s answer begins by clarifying the growth mechanisms of the semiconductor industry. First, regardless of shifts in technological content, the semiconductor industry fundamentally remains an intermediate goods industry. It relies on a broad spectrum of basic industries for raw materials and equipment components (such as silicon materials, heavy machining, and infrastructure construction), and equally relies on a vast array of terminal product industries for application (such as the computer and software industries). This determines that the developmental foundation required by the semiconductor industry far exceeds the industry itself. It also dictates that only a country like China, possessing a complete industrial system, can lay out the semiconductor industry comprehensively, whereas the vast majority of other nations can only develop localized nodes under conditions of globalization. Second, regardless of changes in the division of labor, no single node within the semiconductor industry can exist independently. It requires supply support from upstream nodes and application demand from downstream nodes, and will conversely influence the development of these interconnected upstream and downstream sectors.

These two characteristics imply that whether a country can achieve a comprehensive breakthrough in the semiconductor industry depends on two interconnected critical conditions: first, possessing a complete industrial layout, encompassing not only the internal nodes of the semiconductor industry but also upstream basic industries and downstream terminal product industries; second, forging strong supply-demand linkages among enterprises within this comprehensive layout. The term “strong” implies that the scale of supply-demand linkages must reach the threshold of mass production, without which it is impossible to drive the capability growth of enterprises. This paper defines such a complex industrial linkage spanning the semiconductor production and application processes as a “semiconductor industrial chain.” Only by forming such an industrial chain can the development of any single node receive support from its upstream and downstream counterparts, and can the overall development of the semiconductor industry gain the backing of the upstream and downstream industries, and indeed the entire industrial system. Conversely, in the absence of an industrial chain, even a country with a complete industrial layout will gradually fall into stagnation or even decline due to a lack of developmental support, making an industry-wide comprehensive breakthrough impossible.

History proves that the root cause of the backwardness of China’s semiconductor industry was not a weak developmental foundation or insufficient policy support, as many popular explanations suggest, but rather the persistent failure to develop a complete, localized industrial chain. As early as 1956, China began researching semiconductor technology through national scientific planning and comprehensively laid out the semiconductor industry during its massive industrialization process. [2] However, as the planned economy tightened in the 1960s (to address the economic chaos brought by the “Great Leap Forward”), the downstream demand for the semiconductor industry was restricted to limited military and scientific research fields. Furthermore, internal nodes were “fragmented” by different administrative systems—for example, semiconductor R&D and production fell under the Fourth Ministry of Machine Building (Ministry of Electronics Industry), while semiconductor materials fell under the Ministry of Metallurgical Industry. [3] Under these circumstances, the supply-demand linkages among various enterprises were not only small in scale but also strictly constrained by central planning directives. They struggled to secure investment outside of state plans and to expand R&D and production scale amid restricted downstream demand. A series of political movements further disrupted these already fragile industrial ties. Therefore, although China closely followed the US in early semiconductor research, it consistently lacked the technological capability to translate research outcomes into industrial products, failing to cross the threshold of mass production before the end of the planned economy era. [4]

While China was constrained by the planned economy, the international semiconductor industry underwent profound transformations. In the 1950s, China, the US, and the USSR were the only three countries capable of developing advanced semiconductor technologies. Other nations, lacking the demand for cutting-edge national defense weapons, could only develop inferior technologies (such as germanium transistors). However, entering the 1960s, China’s development slowed, and the Soviet Union abandoned semiconductor technology in favor of miniaturized vacuum tubes (to prepare for nuclear war). Only the United States embarked on a developmental path that integrated advanced technology with large-scale civilian commercialization. Facing low-cost, high-volume civilian demand, US companies began actively developing mass production capabilities. [5] During this process, the growth of production capacity created strong supply-demand linkages among various division-of-labor nodes (enterprises) and powerfully propelled the continuous growth of downstream industries such as computers and communications equipment, ensuring a constantly expanding downstream demand for the semiconductor industry. Driven by the continuous expansion of supply and demand scale, the US pioneered a fundamentally complete localized semiconductor industrial chain by the mid-1960s. Its emergence meant that every round of technological breakthrough in the US semiconductor industry created a larger developmental foundation for the next round, thereby realizing the high-intensity technological progress epitomized by “Moore’s Law.” [6] Leveraging overwhelming industrial and technological advantages, the US semiconductor industry rapidly expanded into the global market in the late 1960s, securing a dominant position in one fell swoop, and the US semiconductor industrial chain consequently became the core of the international industrial chain.

When China emerged from the planned economy system in the late 1970s, it had shifted from an early pioneer in the semiconductor industry to a laggard. To accelerate development, China began importing integrated circuits (ICs) and massively importing production lines in the 1980s (overwhelmingly in the form of joint ventures). Opening up and learning advanced technology was not inherently problematic; however, the biggest flaw of that round of opening up and importation was the neglect of the importance of indigenous development, gradually evolving into a substitution of localized development foundations with off-the-shelf foreign technologies. As several downstream Chinese industries shifted to procuring imported ICs—which received policy emphasis and possessed superior technology—and products from imported production lines, a large number of localized semiconductor enterprises lost their market growth space, falling into decline or even bankruptcy. [7] Similarly, because the turnkey imported production lines exclusively used foreign materials and equipment, localized semiconductor materials and equipment also lost their application opportunities—the lithography machine, which China has yet to fully master to this day, was abandoned during that exact period. [8] Even after paying the massive price of losing its localized developmental foundation, China failed to acquire genuine technological capabilities from this large-scale importation; the knowledge of how to generate and apply relevant technologies remained firmly in the hands of the foreign entities that developed them. [9] Thus, blind market opening and technology importation not only failed to benefit China but further destroyed the developmental foundation and supply-demand linkages of China’s semiconductor industry.

By the turn of the century, China remained a marginal country in the international semiconductor industry; in 1999, China’s IC sales accounted for a mere 0.8% of the global total, and its production volume represented only 2%. [10] However, China’s rapid economic growth after entering the 21st century altered the developmental trajectory of its semiconductor industry. Following a series of breakthroughs by Chinese enterprises in several downstream terminal product industries (such as computers and mobile phones), China became the world’s largest single semiconductor market around 2010. Emerging market opportunities and investment capabilities attracted many Chinese enterprises to enter the semiconductor industry, supported and encouraged by national science and technology programs and major special projects. Breakthroughs in semiconductor displays (LCDs) and the photovoltaic industry also drove the development of a cohort of pan-semiconductor materials and equipment enterprises. It is fair to say that the developmental foundation of China’s semiconductor industry experienced a revival through this wave of development.

However, constrained by a lagging overall technological level, the vast majority of Chinese enterprises, to enter foreign-dominated markets, still tended to procure more advanced foreign chips, materials, equipment, and design software, and massively supply downstream international customers—because downstream Chinese enterprises were also reluctant to purchase domestic products. Under conditions of unfettered international trade, although this exogenous industrial growth mode did not prevent individual enterprises from growing via globalization, it fundamentally constrained the overall development of China’s semiconductor industry. On the one hand, due to the lack of localized supply-demand linkages, the technological progress of individual enterprises struggled to drive the technological advancement of localized upstream and downstream peers. On the other hand, lacking localized upstream and downstream support, even if Chinese enterprises in any single node made progress, they found it difficult to shake off their technological follower status relative to international leaders, because the technological pathways and market structures of the international industrial chain were always defined and created by those leaders. In other words, reliance on the international industrial chain not only made the overall growth of China’s semiconductor industry exogenous but also “locked” Chinese semiconductor technology into a backward state where surpassing the leaders was exceedingly difficult.

Without developing a localized semiconductor industrial chain, China could not form a capability foundation sufficient to support indigenous technological progress, and no single Chinese enterprise could delve deep enough into the technology. It was precisely this structural defect that ultimately allowed the United States to rapidly choke the technological progress of China’s entire semiconductor industry by targeting specific nodes.

An Unprecedented Transformation at a Critical Juncture

For China, the semiconductor technology war launched by the US was undoubtedly a massive shock. It marked an unprecedented change in the developmental environment of China’s semiconductor industry, but it also thereby catalyzed creative responses from Chinese enterprises. The first to pivot were a series of downstream terminal product enterprises that apply chips, such as Huawei and ZTE. Whether directly impacted by US chip export controls or realizing the need to prepare for future sanction risks, these terminal enterprises began adopting the cultivation of localized chip suppliers as a crucial objective, thereby opening the domestic market for domestic chips (including relevant design software). For example, according to a localized EDA enterprise, Huawei previously exclusively used products from the top three international EDA firms, only exploring domestic alternatives when an international firm failed to cover a specific chip design need. However, upon facing US sanctions, Huawei not only began procuring localized products on a massive scale but also required all hardware suppliers involving chips to trial localized products as backups. [11]

However, the shift among downstream terminal enterprises did not immediately trigger a fundamental transformation in the internal supply-demand structure of China’s semiconductor industry. A vast number of domestic chip design firms still prioritized placing orders with foreign foundries, and domestic foundries still prioritized purchasing foreign equipment and materials. This phenomenon had a dual cause: on the one hand, because China’s massive market is exceptionally vital to any international semiconductor enterprise, the US, to maintain the dominance of its own and allied enterprises in the Chinese market, initially only restricted the export of the most advanced chips, EDA, lithography machines, and other key products. It still permitted Chinese terminal product enterprises to procure legacy chips and allowed Chinese semiconductor enterprises to continue purchasing semiconductor materials and equipment. On the other hand, the Chinese government focused its attention on “patching shortcomings” in the advanced chip sector, especially emphasizing foundational research as the key to resolving “chokepoint” issues, overlooking the fact that Chinese enterprises were equally dependent on imported products in the legacy chip sector. Therefore, between 2017 and 2020, the proportion of chips produced domestically in China as a percentage of total national chip consumption merely inched up from 29% to 31%, with a significant portion of this still produced by international semiconductor firms operating factories in China. [12] Under these circumstances, when the US expanded its strike range to include chip foundries in 2020, China’s semiconductor industry plunged into even deeper difficulties.

However, an external shock even larger than the tech war similarly arrived in 2020. Under the impact of the global spread of the COVID-19 pandemic, international supply chains abruptly fractured, leading to a massive global chip shortage. Particularly after China took the lead in resuming work and production, legacy chips—the most widely applied within the industrial system—became the largest capacity gap. This inadvertently created unprecedented market demand for China’s semiconductor industry. To stabilize production and rapidly seize the market, a large cohort of terminal product enterprises expanded their order volumes with localized chipmakers; to rapidly expand capacity, localized chipmakers likewise drastically increased their procurement scale of localized materials, equipment, and EDA. This shift in supply-demand linkages cascaded through nearly the entire semiconductor industry and related downstream industries, as no enterprise was willing to miss the opportunity to expand its market share.

Although the large-scale “order transfer” to localized enterprises carried historical contingency, those ambitious enterprises, once integrated into the mainstream market, often grew at an astonishing pace. The developmental history of a “small” enterprise is sufficient to illustrate this point. In 2013, Hubei-based Dinglong transitioned from the printer consumables industry to the semiconductor CMP (Chemical Mechanical Polishing) sector (both involve particle grinding technology). In 2015, Dinglong launched the industrialization project for polishing pads, and by 2019, it had built China’s only R&D and production base for wafer polishing pads. However, because localized chipmakers had long relied on imports (a market monopolized by US firms), it struggled to secure large-scale application opportunities. It was not until the pandemic, when foreign suppliers opportunistically raised prices—compounded by the need for continuous capacity expansion—that localized chipmakers began turning to Dinglong’s polishing pads. Despite initial technological levels lagging behind foreign competitors, Dinglong seized the opportunity, continuously engaging in trial and error and improvements at a speed far exceeding that of foreign firms. In just over a year, it developed polishing pads of the same type with superior performance and lower prices, earning the trust of relevant user enterprises and beginning large-scale shipments. [13] In 2021, Dinglong’s polishing pad sales revenue reached 302 million RMB, a year-on-year increase of 284%, and achieved scale profitability for the first time. [14] There are many enterprises like Dinglong; while their progress might not be considered technically “cutting-edge,” they robustly supported the rapid capacity expansion of localized chipmakers at an industrial level, thereby capturing a larger market share.

Starting with China’s massive expansion in legacy chips, large-scale supply-demand linkages began to form among the various enterprises within the semiconductor industry, thereby preliminarily forming a localized semiconductor industrial chain supporting indigenous technological progress. [15] Once this structural change occurred, it rapidly placed China’s semiconductor industry on a developmental path of endogenous capability growth. Benefiting from the massive procurement by localized chipmakers, localized materials, equipment, and EDA suppliers achieved technological breakthroughs, which in turn supported the capability growth of localized chipmakers. The growth of localized chipmakers propelled the expansion and strengthening of several downstream terminal enterprises, and the prosperity of downstream industries provided an even larger market scale and application opportunities for the overall technological advancement of China’s semiconductor industry. Consequently, although the global semiconductor market swung from shortage to glut in the second half of 2022, China’s semiconductor industry continued to expand capacity at a scale double the global average increase, and the revenue and profits of several leading enterprises maintained an overall upward trend. From 2020 to 2024, China’s largest chip foundry, SMIC, saw revenue growth exceeding 100% while maintaining relatively stable profit margins; the second-largest foundry, Hua Hong Semiconductor, experienced more volatile profit margins but similarly achieved revenue growth surpassing 100%; China’s largest semiconductor equipment enterprise, Naura, saw revenue growth of nearly 400% and profit growth exceeding 940%, vaulting into the position of the world’s sixth-largest semiconductor equipment supplier. Such staggering growth momentum is extremely rare in the entire history of the international semiconductor industry, let alone against the backdrop of a market glut. This sufficiently demonstrates that China’s semiconductor industry is fully capable of achieving robust development in an independent and autonomous manner.

With the continuous expansion of the localized industrial chain, Chinese enterprises, possessing ever-growing technological capabilities, began to make rapid breakthroughs in a series of “chokepoint” or “shortcoming” nodes. For example, building on the massive revenue surge in 2021, Dinglong launched an autonomous microsphere project to secure the polishing pad supply chain. Microspheres, an essential polymer particle material for polishing pads with complex physical and chemical properties, had been monopolized globally by American firms. In 2023, Dinglong achieved mass production of microspheres, completing the final piece of the polishing pad supply chain puzzle. [16] Furthermore, Dinglong not only reverse-supplied its CMP polishing pads to foreign manufacturers but also broke the monopoly of Japanese and South Korean firms in the semiconductor display photoresist sector. [17] Similarly in the materials sector, driven by the rapid capacity expansion of localized large silicon wafer manufacturers, XinHua Semiconductor’s electronic-grade polysilicon capacity has expanded to 15,000 tons (the global market size is around 45,000 tons), almost matching international leaders, whereas China once faced the threat of silicon material supply cuts at the onset of the tech war. As the scale of new energy vehicles and automotive chips expands, China has also achieved breakthroughs in related third-generation semiconductor materials; for instance, SICC is already a top-three global manufacturer of silicon carbide (SiC) substrates, while Innoscience is the world’s first enterprise to achieve mass production of 8-inch gallium nitride on silicon (GaN-on-Si) wafers. Similar breakthroughs are occurring in every corner of China’s semiconductor industry. They practically prove a fundamental truth: technological breakthroughs can only be built upon the foundation of industrial development.

Today, the development of China’s localized semiconductor industrial chain has altered the fundamental landscape of this industry. By the end of 2024, China’s chip production had grown by more than 70% compared to 2020, accounting for over 45% of total national chip consumption. Research institutes note that if the current development momentum is maintained, China’s chip production capacity will equal that of leading nations in 2025 and become the world’s largest chip manufacturing nation in 2026. [18] Naturally, many developmental “blanks” still exist within China’s semiconductor industry, and gaps remain relative to international leaders in the advanced chip sector. However, the unprecedented changes over the past few years prove that as long as China’s localized semiconductor industrial chain continues to grow and strengthen, technological catch-up will merely be a matter of time.

A New World for the Brave

From an international perspective, the unprecedented transformation of China’s semiconductor industry similarly portends a significant historical possibility. From the 1960s to the present, the international paradigm characterized by the absolute dominance of the US semiconductor industrial chain has persisted for over sixty years. A cohort of latecomers, including Japan, South Korea, and Taiwan, all grew by “embedding” themselves into the supply-demand linkages of the US industrial chain at localized nodes. [19] Even though the developmental foundation of the US semiconductor industry is no longer complete—particularly relying on East Asia for foundry manufacturing capacity—it can still shape the international division of labor and profit distribution patterns through the supply-demand linkages of its industrial chain. For example, when the US began employing both soft and hard tactics in 2020 to demand that TSMC build large-scale factories on US soil, TSMC, despite knowing the exorbitant costs of building in the US, had no choice but to “comply” with US arrangements and continuously expand its investment scale. It is precisely because any latecomer wishing to enter the international market cannot bypass the US semiconductor industrial chain, and because the cost of losing US support far exceeds the cost of losing the Chinese market, that the US has been able to mobilize various countries to participate in export and market controls against China’s semiconductor industry. In other words, the monopoly position of the US semiconductor industrial chain is both the key to maintaining US market and technological advantages and the root source enabling the US to implement global containment against China.

However, the development of China’s localized semiconductor industrial chain has not only unprecedentedly broken the US monopoly but is also shaking US global hegemony in semiconductors and the entire high-tech sector. On the one hand, the rapid growth of the Chinese industrial chain makes the cost of losing the Chinese market increasingly unbearable for other countries, while the competitive pressure from Chinese enterprises grows ever stronger. In 2024, the majority of international semiconductor firms experienced significant performance declines or severe volatility, particularly companies in Europe and Japan. Consequently, the divergence between the US and its allies has become increasingly apparent over the past year. Most notably, Europe’s three major chipmakers announced almost simultaneously at the end of 2024 that they would double down on their localized business in China and strengthen cooperation with Chinese semiconductor enterprises. [20] On the other hand, leveraging the world’s largest industrial system and the world’s largest semiconductor market scale, the Chinese industrial chain is accelerating its technological catch-up speed across all nodes; for example, it has already narrowed the gap with the US in the AI chip sector. Therefore, the faster China’s localized industrial chain develops, the harder it becomes for the US semiconductor industry to contain the development of Chinese semiconductor technology, and the harder it becomes to maintain its own market and technological advantages.

Such immense stakes have catalyzed a shift in US semiconductor strategy. In the new round of export controls at the end of 2024, the US explicitly included “degrading the development of China’s localized semiconductor system” as a core objective, and significantly expanded the scope of controls to include Chinese semiconductor materials, equipment, and EDA enterprises. The newly inaugurated Trump administration in 2025 has largely continued this strategy. While demanding that countries globally ban Huawei AI chips, it revoked the Biden administration’s export restrictions on US AI chips to other countries worldwide. Clearly, the US strategic intent is to strangle the developmental space of the Chinese industrial chain at both the production and application ends, while continuously expanding the global market scale of US chips, thereby maintaining the global advantage of the US semiconductor industrial chain.

The semiconductor technology war between China and the US is no longer a competition at the level of localized technologies, but at the level of the entire industrial chain. At such a historical juncture, whether China’s semiconductor industry can continue to grow against the trend depends first on whether China can execute strategic adaptations in response to changing external landscapes. In the past, Chinese policy has tended to focus strategically on patching “shortcomings” in localized technologies to overcome US containment. However, the historical lessons of the international semiconductor industry have long proven that fixating solely on localized technological shortcomings while neglecting the development of the industrial chain will ultimately result in an inability to patch those very shortcomings. Japan is a classic example. In the 1980s, leveraging breakthroughs in consumer electronic chips and memory chips, Japan briefly became the world’s largest semiconductor producing nation, thereby inviting comprehensive suppression from the US. Although the US held a dominant political position, capable of forcing Japan to sign unequal semiconductor trade agreements, its industrial capabilities had already begun to decline. US companies, led by Intel, after being forced to abandon the massive memory chip market, could only pivot to microprocessor chips, a market whose scale was still relatively limited at the time (as personal computers, its downstream demand, had just begun to emerge). However, Japan committed a colossal strategic error at the time: it continued to follow the mindset of pursuing technological breakthroughs in localized nodes, causing various nodes and enterprises to revert to a fragmented, isolated state. For instance, to patch their “shortcomings” in personal computers, Japanese computer firms began massively procuring technologically advanced US microprocessor chips (including operating systems), ignoring the developmental needs of indigenous microprocessor chips which were still in their infancy. In other words, when the Japanese semiconductor industry was battered by the US, the Japanese computer industry was ironically helping the US semiconductor industry recover. [21] Ultimately, by the mid-1990s, the US semiconductor industry regained its dominance over the global market relying on the explosive growth of microprocessor chips. The US computer industry, leveraging the architectural advantage of “indigenous chips + operating systems,” once again swept the globe and supported South Korea and Taiwan in entering the memory chip and chip foundry sectors. [22] Under continuous US suppression and the shock of international competition, Japan’s computer and semiconductor industries plunged into a two-decade-long decline, from which they have yet to significantly recover.

For China to achieve ultimate victory in the technology war, it must develop a localized semiconductor industrial chain on par with, or even stronger than, that of the United States. To realize this strategic goal, Chinese policy should prioritize the development of a localized semiconductor industrial chain as the foremost strategic task, rather than merely focusing on localized “chokepoint” nodes for technological breakthroughs. The specific implementation will naturally depend on changing realities, but several strategic principles can be clearly established: China needs to build competitive advantages in any product domain conducive to the expansion of its localized industrial chain (including legacy chips), rather than differentiating treatment based on so-called technological advancement or backwardness; it must dare to impose necessary regulations on the localized market, refusing to allow international enterprises that support US bans to turn around and squeeze the market space of Chinese enterprises; and it must maintain continuous growth of its industrial system, thereby creating larger supply and demand conditions for the expansion of its localized industrial chain. Naturally, the continuous growth of the localized industrial chain will inevitably force China’s semiconductor industry to bid farewell to the familiar international division of labor and profit distribution paradigms of the past. But only by doing so can China genuinely create a new world conducive to its own technological advancement.

Notes:

[1] For related details, see Yin Li, “Semiconductor Industry: A Strategic Look at China’s Supply Chain,” in Francesca Spigarelli & John McIntyre, eds., The New Chinese Dream: Industrial Transition in the Post-Pandemic Era, Palgrave, 2021, pp. 121–136.

[2] Xia Jianbai, Chen Chenjia, and He Chunfan (eds.), The Path of Indigenous Innovation: Commemorating the 50th Anniversary of China’s Semiconductor Endeavors, Science Press, 2006.

[3] Peng Shulian et al., Biography of Liu Yin, Publishing House of Electronics Industry, 2018, p. 249.

[4] Liu Yin, Zhang Ting, et al. (eds.), Contemporary China’s Electronics Industry, China Social Sciences Press, 1987, pp. 273–284.

[5] Christophe Lécuyer, Making Silicon Valley: Innovation and the Growth of High Tech, 1930–1970, MIT Press, 2006, pp. 169–294.

[6] Ernest Braun and Stuart Macdonald, Revolution in Miniature: The History and Impact of Semiconductor Electronic, Cambridge University Press, 1982, pp. 121–180.

[7] Lu Feng, Optical Transformation: An Enterprise and Its Industrial History, Contemporary China Publishing House, 2016, pp. 34–36.

[8] Zhang Zhengyuan, “China’s Former Lithography Machine R&D and Xu Duanyi,” World of Literature and History, Issue 10, 2020.

[9] Douglas B. Fuller, Paper Tigers, Hidden Dragons: Firms and the Political Economy of China’s Technological Development, Oxford University Press, pp. 117–155.

[10] Xie Xiaoxia, “An Analysis of the Gap Between China’s Electronics Industry and the International Level,” China Industrial Economics, Issue 11, 2000.

[11] This information is derived from an interview conducted by the author with a localized EDA enterprise on May 14, 2021.

[12] The total Chinese chip consumption defined in this paper is the sum of the quantity of imported chips and domestic chip production; the latter two figures are derived from annual statistics published by the National Bureau of Statistics.

[13] This information is derived from an interview conducted by the author with a localized memory chip enterprise on August 11, 2023. This enterprise was a critical user that provided early application opportunities for Dinglong.

[14] Corporate data used in this paper are sourced from historical annual reports, quarterly reports, and prospectuses of the respective enterprises.

[15] He Pengyu, “Why Must China Establish a Competitive Advantage in Traditional Chips,” Beijing Cultural Review, Issue 1, 2025.

[16] “Dinglong Achieves Comprehensive Breakthrough in Microsphere Technology, Completing the CMP Polishing Pad Industry Chain Puzzle,” Dinglong Co., Ltd. Official Website, March 15, 2024.

[17] “Dinglong Co., Ltd. Breaks Global Giant Monopoly,” Hubei Daily, April 17, 2025, Page 07.

[18] “China to Become World’s Largest Source of IC Wafer Capacity by 2026,” Knometa Research, April 8, 2024.

[19] John A. Mathews and Cho Dong-Sung, Tiger Technology: The Creation of a Semiconductor Industry in East Asia, Cambridge University Press, 2000.

[20] Ji Kai and Fu Bin, “Europe’s Three Major Chip Giants Reexamine Supply Chains,” Electronic Engineering World, November 22, 2024.

[21] Jason Dedrick and Kenneth L. Kraemer, Asia’s Computer Challenge: Threat or Opportunity for the United States & the World?, Oxford University Press, 1998, pp. 84–108.

[22] Alfred D. Chandler, Inventing the Electronic Century: The Epic Story of the Consumer Electronics and Computer Industries, Harvard University Press, 2005, pp. 132–176.

Editor: Zhiyu Wang