This is the least surprising thing ever and was highly suspected when DeepSeek released their original model.

We've also seen this with sanctions on Russia but they still somehow bought a bunch of TI chips for missiles [1].

As many here know, the US restricts the export of certain technology to China because reasons. This includes lithography machines from ASML, a Dutch company, who have a monopoly on the latest EUV processes. It's geopolitically interesting that the big buyer of ASML products are TSMC in TAiwan as well as Samsung in South Korea (and possibly Japan?).

I expect this will become a national security issue for China and long-term you will see China try and replicate the best lithographic processes and chips such that the gap will greatly narrow. This will take years and involves a lot of depenedent industries but of anyone China has shown the willingness, ability and resolve to pursue decades-long infrastructure and national security projects.

In the meantime, bans on GPU exports to China will continue to be circumvented (eg [2]) and honestly there's no real reason for those export restrictions anyway.

[1]: https://archive.is/S2uD4

[2]: https://www.reuters.com/world/china/us-justice-department-ac...