US curbs sharply limit China's high-end AI chip output, says 'Chip War' author

US restrictions on the transfer of advanced chipmaking technology have significantly curtailed China's capacity to make high-end artificial intelligence chips at home, according to Chris Miller, author of the book 'Chip War' and a leading semiconductor expert.

Speaking in an interview, Miller said China has poured billions of dollars and years of effort into building its semiconductor industry, yet still accounts for only a small slice of global high-end AI chip production. "The evidence suggests that US restrictions have been highly effective in restraining China's domestic chip production," he said.

China is expected to make only a few per cent of the world's high-end AI chips this year, largely through Huawei, Miller said. Taiwan Semiconductor Manufacturing Company (TSMC), by contrast, is expected to account for around 95 per cent or slightly more of global AI chips when measured by computing capabilities.

Miller attributed the gap mainly to China's lack of access to some of the most advanced chipmaking equipment. In particular, China cannot obtain extreme ultraviolet (EUV) lithography machines made by ASML, which are essential for producing advanced semiconductors.

"If the US had allowed those tools to be sold to China when China first tried to buy them now seven years ago, the world would have a very different landscape with China being one of the biggest producers of high-end chips," he said. "But today China is a tiny producer of high-end chips precisely because they can't get those tools."

The curbs have also pushed Chinese AI companies to rely heavily on computing resources and chips from outside the country, including NVIDIA chips reaching China through unofficial channels and access to NVIDIA-powered data centres located overseas, Miller said.

"China's AI firms have been impressive in their innovation, but they've done so with much less computing power," he said, adding that greater access to computing resources could further strengthen their capabilities.

Miller also pointed to significant shifts in the global semiconductor industry since the publication of Chip War, driven particularly by the rapid growth of artificial intelligence. Investment and innovation in the sector have increasingly moved away from smartphones and personal computers towards data centres, AI-focused chip architectures and advanced packaging technologies, he said.