Dylan PatelFounder and Chief Analyst at SemiAnalysis

Export controls are only speeding up China’s chip self-sufficiency.

24 Oct 2026 · 2 min

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1:33

In this commentary, the speaker outlines the evolving dynamics of China's semiconductor supply chain. Historically, China's domestic sufficiency initiative was driven primarily by the state, but it is now transitioning to a more coordinated model where toolmakers and fabs collaborate to design and produce semiconductor equipment and electronic design automation (EDA) tools tailored to China's unique constraints. The speaker argues that export controls, rather than hindering progress, are likely to boost China's localization efforts by increasing motivation and accelerating development. The overall message is that on‑the‑ground observations in China suggest a resilient, internally driven push toward chip self‑sufficiency that will persist regardless of external policy pressures.

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In terms of the supply chain, I think just now we've talked about there are multiple drivers for, I think, for China to be building their own supply chain or trying to accelerate as much as possible. So yeah, we're not an expert on predicting what the policies could be, but what we are seeing on the ground in China is that, well, it's also from the companies themselves. That they're set up that like starting from this year, the domestic sufficiency initiative used to be state-led, but now it's moving to the stage whereby it's more coordinated among the toolmakers and also the fabs themselves, as in they're working together to design, to build the tools, the semi-cap equipment or EDA. And from ground level, because what China needs could be different versus like rest of the world, given some constraints that they have. So, and we believe that that process and this kind of effort will not be affected with the policies as in export controls. In fact, if there are export controls, as we have seen in China's semi-cap localization rate in the past few years, the export controls could accelerate or push them or increase the motivation to, to, to work harder on that. So that's what we are seeing right now.