US Sanctions Fail to Subdue China as Trump’s Strategy Backfires
US export restrictions on advanced chips, implemented under both Joe Biden and Donald Trump’s administrations, have failed to achieve the desired results. Instead, the move has spurred China, led by Xi Jinping, to become significantly more self-reliant and superior.
Since the blockade was imposed, China has shifted focus to strengthening its own advanced AI chip industry, aiming to break free from American technological dominance. This well-planned strategy is now yielding highly satisfactory results for Beijing.
While the US realises the Chinese market is too valuable to lose, Beijing is now playing hardball. The US government has allowed Nvidia’s H200 chip — the company’s second-most advanced offering — to be exported to China, yet Beijing has yet to formally approve its entry.
China has yet to formally permit the H200 chip into the country, proving it no longer relies on US technological support.
Huawei, a Chinese tech giant, has capitalised on this shift to dominate the domestic market. Recent reports indicate the company plans to design high-end chips by 2031.
These high-end chips will feature transistor densities equivalent to a 1.4-nanometre process. This ambition was revealed even as US sanctions continue to hinder China’s ability to produce the world’s most advanced chips.
Huawei’s latest projection was announced on Monday, 25 May 2026, drawing widespread attention.
Huawei introduced the ‘Tau Scaling Law’ principle — a new approach to chip enhancement as the industry can no longer rely solely on shrinking transistor sizes.
He Tingbo, Huawei’s semiconductor business president and director of the Scientist Committee, unveiled the concept in a keynote speech titled ‘New Semiconductor Pathways in Practice’ at the IEEE International Symposium on Circuits and Systems (ISCAS) 2026 in Shanghai, Reuters reported on 1 June 2026.
Although Huawei has not disclosed specific performance data, the target has drawn significant attention. Transistors with 1.4-nanometre density are expected to approach global limits for advanced chip manufacturing by the end of the decade.
China has long been unable to reach this level through conventional manufacturing capabilities, as Washington has restricted access to advanced lithography tools and other key semiconductor technologies.
Huawei’s Tau Scaling Law focuses on reducing signal and data transmission times across chips and computing systems. If successful, it could enable the company to enhance chip performance and density despite China’s restricted access to cutting-edge semiconductor equipment.
Huawei said its latest Kirin chip will launch mid-2026, the first to use the LogicFolding architecture. The company claims this design shortens internal wiring and significantly boosts performance.
Huawei has designed and mass-produced around 381 chips over the past six years based on the Tau Scaling Law for industrial use, including smartphones and AI computing.