You don't understand how much progress SMIC has made, especially over the last 3 years. The lead chip designer that worked on 7nm and 5nm processes at TSMC now works at SMIC. He
voluntarily left with a team of S. Korean and Taiwanese engineers. The ONLY reason why SMIC can't produce 5nm chips is because of export controls, not lack of knowledge of chip design.
"Stealing" engineers is a part of history.
The entire US space program is built on Nazi rocket technology. And unlike the Nazi engineers that were coerced to work for the US, the Chinese have simply bought engineers. Can you think of anything more "capitalist?"
And now, the US is reduced to complaining because it cannot compete. I think it's only a matter of time that Intel throws in the towel and goes fabless like AMD. The US has already lost in chip fab as it relies on TSMC for advanced chips.
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In the long-run, even the Europeans will move closer to China as SMIC becomes more powerful. ASML can't ignore the Chinese growth market. We're already seeing the beginning of a Sino-Euro partnership in EVs:
https://www.politico.com/news/2023/06/23/u-s-and-europe-diverge-on-chinese-electric-cars-ee-00103186 and this will be the future for chips as well.