The rapid expansion of artificial intelligence (AI) is reshaping global demand for semiconductors, bringing renewed attention to the chip supply chain, which has long been dominated by Korean and Western firms. Signs of change are rippling through the chip market. China, driven by massive domestic demand and betting on technological innovation to fuel future economic growth, has been stepping up efforts to achieve chip self-sufficiency and cut dependence on foreign suppliers. This explainer examines China’s progress across the semiconductor value chain, the breakthroughs achieved and the gaps that remain, placing them in context through comparisons with global leaders such as South Korea, and looks at Beijing’s next steps to push the sector forward. China’s semiconductor industry has expanded rapidly in recent years. Output reached a record 484.3 billion units last year, up 85.2 percent from 2020, according to China's Ministry of Industry and Information Technology. Under its 14th Five-Year Plan, which set the economic blueprint for the country during the 2020-25 period, Beijing vo