The Self-Sufficiency Scoreboard

Start with the number that punctures the myth: after a decade of effort and more than $100 billion in subsidies, China still makes only a fraction of the chips it uses. “Made in China 2025” set a target of 70% semiconductor self-sufficiency; the most credible estimates put the reality somewhere between about 15% and 27%, depending on what you count, roughly a quarter of the goal.^[1][2]

The definition is the whole game, and where most confusion lives. Count every chip physically made in China, including those from foreign-owned fabs on Chinese soil, and self-sufficiency reaches the low-to-mid 20s percent.^[2] Count only chips made by Chinese-headquartered companies, and the figure collapses toward single digits.^[1] Either way it is far below target, and the dependence has a price tag: in 2024 China imported $385 billion of chips, its single largest import, exceeding even crude oil.^[3]

Rising at the trailing edge, stalled at the leading one

The scoreboard is lopsided, not uniform. China is genuinely strong and gaining in mature nodes, in packaging, in memory, and in fab equipment, where domestic content passed 35% overall.^[4] It remains critically dependent where it counts most: EUV lithography (no production capability, and a prototype that has not yet exposed a wafer), leading-edge logic, EDA software and select materials.^[5] Self-sufficiency is rising steadily; the leading-edge gap is not closing.

China imports more chips than oil, and after $100 billion in subsidies still makes barely a fifth of what it consumes.

The denominator problem is the single most useful thing to carry out of this sector. Nearly every dispute about Chinese chip self-sufficiency dissolves once you specify whether you mean chips made inside China’s borders, which includes foreign-owned fabs and lands in the low-20s percent, or chips made by Chinese-headquartered companies, which collapses toward single digits. Headlines routinely collapse the two, and the collapse is where the misreading lives. The honest posture holds both halves at once: a bull case in mature nodes, packaging, memory and equipment, and a bear case in EUV, leading-edge logic and EDA, with the caution that no single number can be trusted to describe both.

Why it matters for investors

This is the frame for every other brief in this sector. The bull case, mature nodes, packaging, memory, equipment, and the bear case, EUV, leading-edge logic, EDA, are both true, on different axes. The single most useful discipline is to ask, of any self-sufficiency claim, which denominator it uses and which layer it describes. We underwrite the trailing edge where China is winning, price the leading-edge gap as durable, and distrust any single headline number that collapses the two.