Trump's First-Term Ban On EUV Tools Stalled Huawei, SMIC, Cambricon — Now China's Chip Factories Are Roaring Back, Warns David Sacks

White House-appointed “Crypto Czar” David Sacks warned Wednesday that Chinese semiconductor manufacturers are surging back despite previous export controls, citing new production data showing China’s chipmakers planning to triple artificial intelligence processor output.

Sacks Highlights China’s Semiconductor Recovery Despite Trump-Era EUV Restrictions

Sacks wrote on X that “Chinese companies like Huawei, SMIC and Cambricon are surging production” and will soon compete with American chips globally, referencing a Financial Times report on China’s aggressive capacity expansion.

Chinese Fabs Race To Meet DeepSeek Standards

Three new fabrication plants dedicated to AI processors are launching, with one starting production by year-end and two more in 2025, according to FT sources. The facilities target Huawei’s processors and chips compatible with standards promoted by China’s leading AI startup DeepSeek.

Semiconductor Manufacturing International Corporation SMI, China’s top foundry, plans to double its 7-nanometer capacity next year. Combined output from new plants could exceed SMIC’s current similar production lines once fully operational.

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Trump Administration’s EUV Ban Still Constraining China

Sacks credited President Donald Trump‘s first administration’s “far-sighted decision” to block China’s access to extreme ultraviolet (EUV) lithography tools, keeping Chinese chips “still behind ours.” However, he criticized other restrictions from the Joe Biden era as counterproductive.

“The U.S. government should help our American AI companies win this global competition,” Sacks wrote, warning against forcing partners “into the arms of China.”

Investment Implications For U.S. Markets

Cambricon raised approximately $600 million this year, while four Chinese AI chipmakers, including Biren and MetaX seek IPOs after raising $3 billion combined. Chinese semiconductor stocks surged following DeepSeek’s announcement of new chip-optimized standards, according to the FT report.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Photo courtesy: Jonah Elkowitz from Shutterstock