Thread by @wmhuo168

🧵 How U.S. Sanctions Supercharged China's Semiconductor Supply Chain
The real backfire of Washington's techno-containment strategy (1/14)

tomshardware.com/tech-industry/…

Thread: How U.S. Sanctions Supercharged China's Semiconductor Supply Chain
The real backfire of Washington's techno-containment strategy (1/16)

Washington thought it could freeze China in time. A few export bans, blacklists, and licensing hurdles would supposedly cripple Beijing’s chip ambitions. What actually happened was the opposite. China launched the most intense industrial mobilization in recent history. (2/16)

Far from kneecapping China, the sanctions lit a fire. As Tom’s Hardware reported, U.S. restrictions have accelerated China’s push for full-spectrum self-reliance. What was once fragmented is now a nationally backed, vertically integrated ecosystem. (3/16)

Let’s break down the new supply chain. China is now securing or localizing key links:

Rare Earth Elements

Silicon Wafers

Photoresists and Etching Chemicals

DUV Lithography Tools

IC Design and AI Acceleration

Packaging, Assembly, and Test (4/16)

Rare earths are locked down. Over 90 percent of global REE refining happens in China. The U.S. abandoned this sector decades ago. Today, Beijing controls not just mining, but processing and export licensing. Leverage has shifted decisively. (5/16)

Silicon wafers? National Silicon Industry Group is expanding 300mm wafer production. Japan’s Sumco and Shin-Etsu are no longer unchallenged. On photoresists and etching fluids, Hubei Dinglong and other firms are rapidly scaling domestic capacity. (6/16)

SMIC, under sanctions, is producing 5nm-class chips using DUV machines and the SAQP process. Huawei’s Mate 60 shocked D.C. It ran on a 7nm chip made by a blacklisted company with supposedly inaccessible tools. It broke the narrative. (7/16)

Even Nvidia’s Jensen Huang has called the sanctions a misfire. At Computex, he said China responded with “heroic” innovation. Nvidia’s China market share dropped from 95 percent to 50. Now the company refuses to make new chips for China. (8/16)

China is not pausing. It is pouring over $500 billion into high-tech infrastructure. AI accelerators, 3D NAND, high-bandwidth memory, satellite networking, and photonic chips are all in full-throttle development. (9/16)

And this is not just about technology. It reflects two economic philosophies. The U.S. prioritized fabless profits and offshore arbitrage. China invested in capacity, integration, and hard infrastructure. One system is aging better than the other. (10/16)

And this is not just about technology. It reflects two economic philosophies. The U.S. prioritized fabless profits and offshore arbitrage. China invested in capacity, integration, and hard infrastructure. One system is aging better than the other. (10/16)

Sanctions gave China a blueprint. Every restriction became a benchmark. Each denial drove domestic replication. It became a national mission. A state-backed survival reflex. And Washington handed it over without a second thought. (11/16)

The assumption was China could not catch up. That ASML, TSMC, and Tokyo Electron would remain irreplaceable. But China is rebuilding every layer. Slowly, methodically, and irreversibly. (12/16)

Now the panic is visible. Every new Huawei phone triggers a congressional investigation. Think tanks scramble to explain how a sanctioned nation keeps launching next-gen chips without Western parts. (13/16)

This is no longer a chip war. It is a civilizational contest. Who sets the rules? Who defines progress? The U.S. wanted to freeze China in time. Instead, it set off a chain reaction that is accelerating Beijing’s high-tech rise. (14/16)

Washington underestimated China's resolve and overestimated its own irreplaceability. What began as techno-containment is ending in industrial bifurcation. The gravity of tech is moving east. (15/16)

The U.S. tried to choke China on silicon. Instead, it suffocated on hubris. Sanctions were meant to cripple. What they actually did was launch China into the semiconductor stratosphere. (16/16)