Hardware

The nodes do not matter. Even if their 7nm node was technically identical to TSMCs, there are more aspects you have to compare. Like costs, the wafer throughput, the yields… and there, China simply cannot compete. It works a bit because SMIC is aggressively subsidised, so that the CCP can claim being on par with other countries. But they rely on foreign machines that they don’t get anymore, are cut off from EUV without real perspectives of getting their own, and can only compete because the Chinese government burns billions of dollars on them.