Its not a hardware vs. software kind of costing. The operations needed for radar to work are so fast they need to be hardwired via programmable FPGAs or discrete logic. Even if you account for software, you still have the Chinese advantage because of the sheer number of high quality coders, and more engineers, both software and hardware, coming out from the universities than the rest of the world. The economics favor China because of the combination of the Chinese electronics industry and its immense volume, and the rare earths industry, areas that the Chinese are globally dominant. China dominates Gallium Arsenide, Gallium Nitride and Yttrium (used for phase shifters like on the SPY-1D). There is a thin line, more like gradients of grey between civilian and military applications of electronics, for example, 5G base network stations are also going to use GaN AESAs. I am not saying they are going to be more advanced than in the West, but cheaper. So much Gallium refining was done in China in such volumes that prices crashed, and they have to cut down on production. So cheap that Gallium Nitride --- the essential semiconductor for the next generation of AESAs --- are powering up those Made in China LED flashlights. Ironically, the Chinese government subsidies on GaAs and GaN has something to do with wanting to replace all lighting in China with power saving LEDs to cut down on energy costs and consumption. The Chinese defense industry does not need to rely on expensive boutique fabs like Raytheon and Northrop Grumman does, they just farm their production to the many numerous firms in Nanjing and Shenzhen.
When Trump announced tariffs on Chinese imports, they included rare earths and stuff like Gallium. Immediately the US defense industry complained that it would hurt them.
If you remember, Russia is the top Titanium producer in the world, and they exploited this heavily for military applications, even if it sounds extravagant to the West. China dominates in the elements such as Gallium and rare earths, its no surprise they are exploiting these heavily --- the railgun, the IPS, permanent magnet motors you also hear China wants to put on ships, are heavily reliant on these.
Even as early as when the Type 052C was first introduced --- China isn't as rich then as it is now --- its probably enough to tell you they have found a way to suddenly manufacture the AESAs in a manner so cost effective. It took many years to drive down the cost of the transceivers on the SPY-1 to the SPY-1D(V), and then suddenly you got a ship that has more transceivers than a Burke; Type 346 has over 5,000 transceivers per face, or over 20,000 for the entire ship, while SPY-1D(V) has about 4,300 to 4,500 per face. The 052D and the 055 has even bigger faces than the 052C. On top of that for the 055, you got that new X-band AESA, though I don't know the dimensions for it, using APAR as a reference, each face on the APAR is about 3,500 transceivers. So potentially the X-band radar on the 055 mast adds another 3000 to 3,500 transceivers per face or 12,000 to 14,000 elements over the 20,000 plus elements on the main radars. And then you still have the 8 arrays lining up on top of the bridge like a ring. For an current modern warship, this number of transcievers is unheard of and unprecedented. Much less you decided to manufacture around 8 to 10 of them. And cost what? For just a billion dollars per ship? A new Burke would already cost over 1.5 billion US$ to make, maybe more, still with the SPY-1D(V).
When you decide to manufacture AESAs and their components in large volumes, that of course, would drive their prices down like any other electronic product. China trying to leverage this production not just in the navy, by making every ship use it in the future but also in the air force with every plane and army, and to the civilian commercial side, also helps drives down the cost for all.