I was just giving an example. But China still doesn't have any photo-lithography machine tool manufacturers. Like I said, there is a total of THREE manufacturers worldwide. Europe, the United States, and Japan. With the Japanese vendor being way behind the other two. All the semiconductor factories the Chinese are building will rely on those tools. Due to sanctions the Chinese can only buy tools which are two generations behind as is. China is still behind even in process engineering, which isn't exactly simple either. Even with all the IP theft SMIC has done to TSMC they are still way behind in process engineering. i.e. how to actually use the tools to produce good performance chips.
Process might not matter as much in some parts of the military segment, like most weapons systems, but it does matter in the consumer sector. It means the chips will either use more power or will have less performance. As for "Moore's Law being dead" people have been claiming that since the 1970s. It slowed down in the past decade but it has not stopped yet. There is a roadmap to continue the process improvements for at least another decade.
Back when the F-22 came out, it used leading edge processes in the processors it came with, the radar also required a leading edge process. Now, that over a decade has passed, those processes are old hat. At the time those processors were required to do signal processing for the AESA radar. However the thing with radar algorithms is that the more computing power you can dedicate to them the more accurate the results you will get. China will always be two process generations behind due to current trade laws. This can as little as 4 or as many as 6 years behind the leading edge. Now that people are focused on AI even the current processes are not dense enough for the required applications. e.g. autonomous driving. these technologies rather obviously also have military applications. DARPA originally sponsored autonomous driving technology in the USA for example. This was intended to be used in logistics trucks and the like, but could be used in other applications as well.
Being two processes behind means that while, for example, you can put a 32GB NAND Flash chip on a smartphone, the other competitor, with a leading edge process, can put a 128GB NAND Flash chip which takes the same volume inside the smartphone. You have a dual-core chip, they have an eight-core chip. i.e. it's the difference between competing at the top end of the market, where most of the profit is, and being at the bottom end of the market, with razor-thin margins.
You claim at one point it will cease to matter. But the thing is, new applications always come up, once it was 3D graphics, then higher screen resolutions, right now, it is AI applications.
China has had some successes in the machine tool industry. Like for example when they bought KUKA in Germany (a deal which I'm still unsure how the Germans even allowed to pass). Can you even remember the name of a single heavy construction machine vendor from China? Because I sure can't. Let alone precision machine tools.
China has had successes in the solar cell and battery cell markets but the semiconductor market will be a lot tougher to crack.
