This policy has been chaotic and often contradictory, exemplified by the saga of Nvidia’s H20 AI chip. This state-backed mobilization is now setting concrete goals, with major cities targeting over 70% AI chip self-sufficiency by 2027. Sources suggest the domestic DUV equipment could face “phenomenally low yield rates,” particularly if pushed to produce more advanced 5nm processes. Huawei’s AI CloudMatrix 384 cluster, for instance, already seemingly outperforms Nvidia’s equivalent GB200 system on paper but does so through brute force, consuming nearly four times the power. The national strategy aims to triple domestic AI chip output by 2026, with Huawei planning to open its first dedicated AI chip plant by the end of 2025.