Semiconductor industrial policy spending in China totaled around $142 billion between 2014 and 2023, roughly 3.6 times higher than the $39 billion committed in the United States over the same decade, according to a recent report published by the Center for Strategic & International Studies in early March. The report argues that China's massive technology spending has given it a better position on the international stage in both influence and power, and it suggests "other governments need to respond pragmatically to reduce the downside costs."
The comparison covers direct industrial policy support across the full semiconductor value chain. South Korea placed second at $55 billion, followed by the EU at $47 billion, Japan at $17.5 billion, and Taiwan at $16 billion. However, the report’s 2014 to 2023 window predates most disbursements from the U.S. CHIPS and Science Act, which was signed into law in August 2022, and it doesn’t capture the third phase of China's Integrated Circuit Industry Investment Fund (‘Big Fund III’), launched in May 2024 at roughly $47.5 billion.
The report draws on 2025 Semiconductor Industry Association data to argue the spending has not yielded a leading-edge breakthrough. U.S.-headquartered chip firms still account for more than 50% of global semiconductor shipments by company headquarters, against 4.5% for Chinese firms.
SMIC's share of global fab production is also placed at roughly 6% as of mid-2025 by the report, ranking it third behind TSMC and Samsung. SMIC sits at least two to three generations behind TSMC on analyst assessments, with reported wafer yields as low as 20% for its 5nm process and 25% to 46% for 7nm, while Intel, Samsung, and TSMC press on with 2nm processes and achieve yields as high as 90%.
SMIC remains realistically locked out of the sub-7nm node without access to ASML's EUV (and, soon, potentially DUV) lithography scanners, the report states, and with Kennedy arguing the gap to the cutting edge may widen rather than close. Chinese labs have tried Frankensteining together reverse-engineered EUV tooling, but these haven’t yet produced a single chip. On the design side, Nvidia's share of the global GPU market sits above 90%, with Chinese entrants including Huawei's Ascend series, Alibaba's T-Head, Cambricon, and Moore Threads all trailing on compute performance. Kennedy cites R&D intensity as a further constraint, with American chip firms reinvesting an average of 17.7% of sales into research and development, against 9.2% at Chinese counterparts.
Beijing's Big Fund III, launched in 2024, was aimed at closing gaps in fab tools, EDA software, and AI accelerators. The report cites analyst Jimmy Goodrich characterizing China as likely to remain a "fast-follower" perennially challenged to keep pace with global leaders for the foreseeable future, a conclusion Kennedy endorses in the face of U.S. export controls on advanced lithography and the widening R&D spend gap.
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