What prevents countries from producing advanced chips and tooling? What's so difficult about it?

Currently, Taiwan produces the overwhelming majority of semiconductor devices at the most advanced process nodes. Meanwhile, Dutch company ASML is the sole source of the extreme UV lithography devices that are needed to produce these chips.

What's preventing other countries from bootstrapping their way up to being able to produce these devices? China and India aren't exactly lacking in industrial capacity and access to natural resources. Both countries have pretty robust educational systems, and both are able to send students abroad to world-class universities. Yet China is "only" able to produce chips at the 14nm process node, while India doesn't have any domestic fabs at all. And neither country has any domestic lithography tooling suppliers that I'm aware of.

EDIT
Also, I'm 100% certain that China would have an extensive espionage operation in Taiwan. TSMC and other companies aren't operated by the Taiwanese government, and so wouldn't be subject to the same security measures as a government research lab. China must have obtained nuggets of research data over the years.

Where are AMD Ryzen chips made?

Taiwan

It was only August last year that AMD released the Ryzen 9000, including the Ryzen 7 9700X, using 4nm silicon for the chip's CPUs made by TSMC's Taiwan factories, aslo known as the TSMC N4 node. So, moving some of that production to the Arizona fab so soon certainly looks like a vote of confidence in the facility.Jan 10, 2025

China Makes Huge Chip Breakthrough

 

China Makes Huge Chip Breakthrough – 7 Nanometers Without EUV Lithography Machines

September 18, 2023

Huawei’s Kirin 9000S system-on-chip powers Huawei’s new Mate 60 Pro smartphone reportedly is using 2nd generation 7nm-class fabrication process and stacking made by China-based SMIC.

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Huawei was known to have been stockpiling chips from its HiSilicon unit before TSMC cut ties to comply with US sanctions. TSMC started making 7 nanometer chips back in 2017.

The costs are higher using the older process DUV machines instead of EUV machines. The costs are probably 30-50% higher. However, the fact that China can make these 7 nanometer chips at all is a huge creative achievement. This is what the global semiconductor industry would have had to do if EUV (Extreme Ultraviolet) machines were not successfully made about 8 years ago. China will be able to make 5 nanometer chips in about 2 years. It will be too difficult to push DUV (Deep ultraviolet (DUV) lithography) machines to achieve 3 nanometers or less.

Huawei and Semiconductor International Manufacturing Corp (SMIC) declined to provide details. Based on tests conducted on the smartphone, Chinese benchmarking website AnTuTu identified the central processing unit (CPU) in the Mate 60 Pro as the Kirin 9000s from Huawei’s chip design unit HiSilicon.

Research company TechInsights (based in California) said in a note on its WeChat account that SMIC has used existing equipment and applied its second-generation 7-nanometer process, known as the N+2 node, to manufacture the 5G-capable Kirin 9000s for Huawei.

Another possibility is Huawei built a secret chipmaking supply chain by recruiting existing foundries to help it skirt US export controls. In this case, the chip inside the Mate 60 showcases how Huawei has achieved a breakthrough.

The third possibility is that this based on stockpiled chips from before sanctions were made stronger.

China likely made these chip using deep ultraviolet immersion ASML machines and not the EUV (extreme ultraviolet machines.) DUV machines use 193 nanometer light while EUV use 13.5 nanometer light. DUV machines were used by the global semiconductor industry to make 14 nanometer process chips.

The China 7 nanometer chip has comparable performance to a Qualcomm chip made with a 4 nanometer process. This would be huge if China is matching computer chips with 4 to 7 nanometer processes. This would mean a technology gap of only a few years.

SOURCES – South China Morning Post, Asianometry, AnaStasi in Tech