China's advanced-chip gap could close well before its lithography gap does

China's aggressive chip capacity expansion reflects a strategic push to secure sovereignty over critical process nodes, driven by diminishing access to global supply chains. This move triggers cascading effects across upstream sectors, especially in lithography and materials, where domestic substitutes are accelerating but core technological gaps remain. Compliance pressures force companies to restructure global operations, raising costs but enhancing supply chain resilience. Internationally, the U.S. and Europe may tighten export controls, while Japan and South Korea could seek strategic partnerships. Over the next 12–24 months, the tech dynamics between Taiwan, China and mainland China will intensify, with the semiconductor industry's geopolitical dimensions becoming more pronounced. The resilience of China’s domestic manufacturing ecosystem will be a defining factor in shaping global supply chain strategies.