Taiwan Economic Research Institute Says: China's Ability to Manufacture Advanced Chips Has Reached Its Limit, Breakthrough Expected in at Least 5 Years

"Technology knows no borders? Don't be naive! Chips are the atomic bombs of the new era; whoever masters them controls the air supremacy of future wars!" — Ren Zhengfei

1. Taiwanese Experts Speak Out: China’s Chip Manufacturing Has 'Reached Its Limit', Don't Expect to Catch Up with the U.S. in 5 Years?

Recently, Liu Peizhen, Director of the Industrial Economics Database at the Taiwan Institute of Economic Research, made remarks that have caused a stir in the tech community.

She stated: China’s current capability to manufacture 7-nanometer chips has already "reached its limit." Why? Because:

1. Low Yield: Using DUV lithography for multiple exposures, the yield is only around 50%, barely usable, but the cost is extremely high; 2. Not Profitable: To achieve a 70%-80% yield to be profitable, China is currently "not counting costs"; 3. Bottleneck: Without EUV lithography, 5-nanometer and 3-nanometer chips are out of the question, and the yield from multiple exposures is "very undesirable."

In short: Chinese chips are currently a 'money-burning effort,' still five years away from true independence!

2. But Reality Hits Hard: Huawei Mate 60 Emerges, 7-Nanometer Chips Already in Mass Production!

Amidst the Western pessimism, Huawei suddenly released the Mate 60 Pro, equipped with the domestically produced 7-nanometer Kirin 9000s chip, supporting 5G! The world was shocked!

Disassembly results: The chip is manufactured by SMIC, designed by Huawei HiSilicon; Localization Rate: More than 95% of components, excluding memory, have achieved domestic replacement; Symbolic Meaning: It has been called the 'Fight-Back Machine' by Chinese netizens, and the U.S. extreme suppression has declared failure!

Associate Professor Zhu Feida from Singapore Management University bluntly stated: "Huawei's transition from 15,000 U.S.-made components reliance to almost fully domestically produced is surprisingly fast!"

3. Truth Revealed: Where Is China's Chip Bottleneck?

However, don’t be misled by the '7-nanometer' hype; we must calmly analyze the challenges ahead:

In EDA tools, China still heavily relies on the U.S. and Germany, and the U.S. can cut supply at any time. In lithography, although DUV is available, EUV is still banned — without EUV, 5-nanometer and below chips are hopeless. In materials/equipment, while some domestic production has been achieved, high-end still relies on imports, monopolized by Dutch ASML and Japanese Shin-Etsu. In talent, although there are encouraging signs of a large return, top talents are still scarce, and the U.S. continues to block Chinese scientists.

Core Conclusion: China can "make 7-nanometer chips by traditional methods," but to catch up with TSMC’s 3-nanometers, lithography machines are the biggest shortcoming!

4. Has the U.S. 'Small Courtyard with High Walls' Strategy Failed? Allies Begin to Switch Sides!

The U.S. has formed a "chip alliance," recruiting the Netherlands, Japan, and South Korea to contain China, with the result:

Former ASML CEO Peter Wennink publicly countered: "Completely isolating China is hopeless! If you don’t give them technology, they will develop it themselves!"

Qualcomm CEO is crying in the bathroom: Huawei's return is expected to reduce orders by 50 million chips next year, with 60% of Qualcomm's revenue coming from China, directly adding insult to injury!

Micron has been banned from the Chinese market: In May 2024, China banned Micron on the grounds of "national security," causing its stock price to plummet by 6.8%!

American politicians want to win, but companies want to make money, which creates a contradiction!

5. China’s Countermeasures: Prohibiting Apple Phones, Striking at America's Weak Spot!

Do you think China will only take hits? Wrong!

In August 2024: China banned government personnel from using Apple phones, causing Apple’s stock to drop 6% in one day, evaporating $190 billion in market value!

In September 2024: China implemented export controls on gallium and germanium, choking off the throat of chip raw materials!

Huawei’s strong return: In Q3 2025, Huawei phone sales surged by 120% year-on-year, while Apple’s market share in China fell below 15%!

Taiwanese expert Liu Peizhen admitted: The China-U.S. tech war has entered stage 2.0 — China has started to counterattack!

6. Future Predictions: 5 Years Will Determine the Life and Death of China's Chips!

Optimists (Wu Lingxiang) believe: China needs to address "all shortcomings" in the semiconductor supply chain, with lithography machines being key, catching up in 5 years is not a dream;

Cautious faction (Zhu Feng) believes: The U.S. may shift from "small courtyard with high walls" to "big courtyard with wide walls," with a broader and stricter blockade;

Realists (Liu Peizhen) believe: China's chip industry needs to solve the commercialization problem of "from 1 to 100," and cannot rely solely on state funding.

7. The Chip War: China Can't Afford to Lose, and Winning Isn't Easy!

1. Don’t be blindly confident: 7-nanometer ≠ 3-nanometer; without breakthroughs in EUV lithography, high-end chips will always be bottlenecked; 2. Don’t belittle yourself: Huawei's ability to rise from the ashes proves that China's technological resilience far exceeds Western imagination; 3. National Awakening: This war is not a business battle between companies, but a battle for national destiny! Every effort to support domestic products is paving the way for the future.

The good news is that the situation is reversing.

On December 8, U.S. time, Trump posted on his social media platform Truth Social, stating that under the premise of ensuring U.S. national security, he would "allow Nvidia to deliver its H200 chip products to China and other qualified customers in other countries."

In fact, "ensuring U.S. national security" is just an excuse for the U.S. to admit defeat! Although Trump emphasized in the post that the allowed exported chips would not include Nvidia’s more advanced Blackwell and the soon-to-be-released Rubin chips, the H200 chip is more advanced than the previous H20.

At the same time, Jensen Huang has admitted that Huawei's chip performance has reached the level of H200, so imposing further restrictions on China is meaningless. Therefore, the U.S. loosening chip restrictions on China equates to a passive acknowledgment that it has already lost this chip war.

At this moment, we are reminded of the old saying: "Blockade! Blockade for ten or eight years, and all of China’s problems will be solved!" This is indeed a profound saying!

Please share this article to let more people see: The 'limit' of Chinese chips is not the end, but the starting point for a counterattack!