How China Built a Chip Industry, and Why It’s Still Not Enough

NYT Homepage

by Meaghan Tobin

February 14, 2026

AI-Generated Deep Dive Summary

China’s decade-long push to achieve self-sufficiency in chip production has yielded limited success, as domestic firms continue to lag behind foreign competitors in both quantity and performance. Despite investments exceeding $150 billion, Chinese chipmakers are producing a small fraction of the advanced chips made by companies like Nvidia. This shortfall is partly due to U.S. export restrictions that limit access to critical tools and technology, making it difficult for China to close the gap. The article highlights the challenges faced by leading Chinese tech firms such as Huawei, which aims to match the performance of Silicon Valley’s current chip offerings within two years. However, experts like Eurasia Group director Xiaomeng Lu note that even national champions are struggling in this uphill battle. Despite these obstacles, China’s AI industry remains dynamic, with significant government and private sector investments driving growth. Chinese tech stocks have surged, with companies like Alibaba seeing massive gains, and numerous AI startups going public or raising substantial funds through listings in Hong Kong. While Washington’s export controls have slowed chip development, they have also spurred Beijing to double down on strategic technologies like semiconductors and AI, emphasizing self-reliance. The interplay between U.S. restrictions and China’s internal momentum underscores the broader implications for global tech competition. As China seeks to dominate in AI and advanced manufacturing, its progress—or lack thereof—in chip production will significantly impact its ability to achieve technological parity with the United States and other global players.

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Originally published on NYT Homepage on 2/14/2026