Technology
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Why did anyone think otherwise?
Because manufacturing super high tech chips is extremely hard and complicated and basically only a couple companies in the world can do it and they also depend on parts and technology from other companies all over the "western" world. China didnt have anything near this capability. It requires advanced research and knowhow on a million different technologies. So unless China does extensive industrial espionage(which they are trying to do), it's gonna take them like 10+ years to start producing anything relatively modern without needing any external parts/help.
In any case, it remains to be seen if it is actually 7nm. With a new cold war ramping up, China is trying to become self-reliant as much as possible.
Let me summarise your point above: "the yellow people are too stupid to make chips. If the are doing it, they must be stealing from smart Westerners."
Just how racist are you?
Neither Europe nor the US can make chips like this, thats why they are trying so hard to convince TSMC to make a chip fab in their territories. Does this mean that white people are too stupid to make chips? No, they just cant atm and they arent willing to invest the infinite time and money it would take to reach that level, especially since their ally Taiwan(TSMC) is already making the most advanced chips in the world.
China on the other hand needs to become more self reliant, especially with the new Cold War escalating. So they have to do it. And they are doing it. But it will still take a lot of time and money to be able to manufacturer modern high end chips.
TSMC is taiwanese, which is "yellow" people. Why are you trying to spin this as a racist thing? Literally the best people in the world manufacturing chips are taiwanese(han). Why would anyone think that the chinese, who are basically the same ethnicity(han), wont be able to make advanced chips because of racial reasons?
"Western" in this case includes Korea and Taiwan.
Except that's not his point. The US currently can't make this shit either.
Come on, Intel!!
I think they refer to the lithography machines, which are built by ASML in the Netherlands.
A lot less racist than you are ignorant on this topic
Holy straw man Batman!
It's not stupidity. You need to invent the tools that are needed to make the tools that make the tools that make the tools that make the thing. China still hasn't independently invented most of those tools yet, so they've been relying on finished tools from other countries. Being smart doesn't wipe away the decades of research needed to make something. We all expect China to eventually be able to make an equivalent tool, but they're working with a handicap of inexperience which was expected to take years of dedication to overcome. Which is why everybody is skeptical that China made this independently without outside help or knowledge.