Jonathan Chin
US export controls keep China behind in the chip war, yet advanced packaging and post–Moore’s Law innovations offer new paths forward.
US chip-making giant Nvidia announced in July that it would resume sales of its H20 artificial intelligence chips to China, having obtained the go-ahead from the Trump administration after an effective export ban was imposed in April. For China, the move marked a rare reprieve from the onslaught of increasingly stringent controls by the United States to constrain the Chinese chipmaking industry since the first set of export controls was launched in October 2022. In response, Beijing has urged domestic firms to avoid using the H20 chip over alleged security and reliability concerns.
However, Chinese firms clearly prefer foreign chips over domestic alternatives. In 2024, Chinese firms bought around one million Nvidia H20 chips, far exceeding an estimated shipment of 450,000 Huawei 910B chips. Earlier this year, Alibaba, ByteDance, and Tencent rushed to stockpile $16 billion in H20 chips in anticipation of the US ban. So while some argue that trying to deny China access to cutting-edge chips has accelerated Chinese innovation, at least for now, US export controls appear to be keeping China behind industry frontrunners.
What Makes a Chip Advanced?
But what does it mean to be ahead or behind in semiconductors? To understand why these controls matter, it is worth stepping back to examine what makes a chip advanced in the first place. At the core lies transistor density—the number of transistors that can be packed onto a single chip. Transistors are essentially the building blocks of chips, acting as microscopic switches to perform computations. The greater the density, the greater the power and efficiency of a chip. For decades, the process of shrinking transistors to make ever-tinier semiconductors has fueled leaps in computing power—powering required for everything from smartphones to ChatGPT—while also steadily driving down the cost of computing. Today, the most advanced node sizes measure just two to three nanometers (nm)—about the width of a single strand of human DNA.
The Rise and Fall of Moore’s Law
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