Your claims are that China is 20 years behind and lacks the technological know-how to catch up. My claim is that China is 5 years behind hardware-wise, already knows how to scale fabrication for near-bleeding-edge nodes, that those 5 years are only marginally important because of the end of Moore's Law, and that Nvidia's effective monopoly makes that 5 year lead very tenuous indeed. Essentially, that the West's technology node lead is basically irrelevant.

This entire semiconductor war is operating under the assumptions that China is bound by power and production constraints (due to cost) and thus cannot outpace US AI development. Military/space applications don't care, Huawei's already fucked by sanctions, consumer electronics OEMs are untouched by sanctions, edge devices consider 28nm to be the brand shiny new node...

Basically, it pins the entire issue on the back of Nvidia. Of course, Nvidia is now charging $40k per H100, Facebook holds the bulk of them, and the cost of building a GPU cluster is skyrocketing.

Meanwhile, construction is cheap in China due to oversupply in the construction industry, electricity is cheap in China due to oversupply in the green energy industry, and basically everything 14nm+ is also cheap due solely to already having the equipment to build it. Nvidia's lead in efficiency cannot offset 40k capex, which is what the next few years will show.

So, surprisingly, my conclusion is that China's lack of bleeding-edge node capability does not have a significant immediate geopolitical implication. China is perfectly capable of building 28nm chips, and with that 14nm is rather trivial. This is using either domestic supply chains or unsanctioned foreign supply chains. Should China languish for another decade, we may run into problems, but SMIC is on track to release 5nm this year (widely estimated to be the peak economically achievable by DUV quad-patterning) and SMEE has already announced a domestic ArFi DUV lithography machine. The supply chain is there. The gap towards EUV is twofold: the high-power light source and the photoresist. Reminder that both TSMC 7nm and Intel 7 do not use EUV, and their yields are perfectly acceptable (both nodes took some time to scale, I'll admit). Everything else is a matter of throwing manpower at the problem.

Let's take a step back and assume that China is stuck in their current state indefinitely. That is, they can produce DUV machines absurdly cheaply, but will never have an EUV machine. Even if China is stuck on 7nm while Intel rolls out 18A, so what? $/transistor isn't scaling with node anymore, so the main driver is perf/W. Given that China's green energy transition will pump absurd amounts of electricity into the grid in the near term, the more accurate driver is work/J. This matters solely, solely for mobile applications where reliability isn't a concern.