On October 30, DSET visited the Hudson Institute in Washington, D.C., for a roundtable discussion. The event was hosted by Michael Sobolik, Senior Fellow in Foreign Policy, and joined by Dr. Miles Yu, Director of the China Center and Senior Fellow, as well as Riley Walters, Senior Fellow for Global Economic and Technology Policy. The discussion centered on China’s semiconductor industry strategy, its global implications, and policy responses among democratic technology nations.
In his opening remarks, Dr. Jeremy Chih-Cheng Chang, CEO of DSET, noted that DSET’s Economic Security Research has been conducting open-source intelligence (OSINT) research on China’s semiconductor supply chain to better understand Beijing’s domestic and overseas policy mechanisms. These researchs, he said, aim to help democratic allies develop more resilient economic security policies. Dr. Chang emphasized that China is rapidly expanding its mature-node chip production capacity while seeking to localize advanced AI memory manufacturing and increase offshore AI data center deployment. He underscored that democratic technology nations must act early to safeguard their leadership in global innovation.
Min-Yen Chiang, Deputy Director of DSET’s Economic Security Research, presented findings from the recent publication that responds to ongoing debates over semiconductor export controls on China. Chiang argued that China’s domestic market demand has long enticed foreign suppliers to trade technology, products, and talent for commercial gain—an exchange that continues to shape the trajectory of AI-related export control discussions today. Using the case of ChangXin Memory Technologies (CXMT), China’s leading DRAM manufacturer, he highlighted the importance for democratic nations to strengthen investment screening and prevent predatory talent recruitment.
Read the report here: https://dset.tw/en/research/the-rise-of-cxmt-inside-the-hydra-like-chinese-memory-sector/
Chiang explained that CXMT’s key technological origins trace back to a German DRAM firm, and the company has been actively recruiting engineers from Taiwan. He noted that China’s decentralized industrial policy fosters competition among domestic firms to drive technological innovation, while local governments play a complementary role by funding infrastructure, investing through government-backed funds, and stimulating demand for end-use products. The CXMT case—often described as the “Hefei Model”—demonstrates how China’s semiconductor policy has achieved local success and could soon challenge the dominance of traditional memory leaders in the United States, South Korea, and elsewhere.
Chiang further emphasized that China’s growth in mature node semiconductors is reshaping the global landscape and may soon displace Taiwan’s leading position in certain manufacturing segments. DSET’s comparative case studies reveal that many Chinese semiconductor firms, backed by state subsidies, sustain long-term investment despite short-term losses—an approach that distorts market competition and gradually erodes the technological advantage and competitiveness of companies in democratic countries.
Responding to audience questions, Dr. Chang highlighted that controlling global talent flows into China’s semiconductor sector remains a major challenge. Both the United States and Taiwan have implemented restrictions preventing semiconductor experts from working in China’s chip industry. While the scope and enforcement mechanisms differ, the overarching policy objectives are aligned. Dr. Chang concluded that ensuring effective and consistent enforcement will be difficult, underscoring the critical importance of international cooperation in safeguarding democratic innovation ecosystems.
