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Gavekal Technologies: Chips
What To Watch In 2026
Laila Khawaja
8 Jan 2026
The year 2025 was pivotal for US–China semiconductor and AI development. It saw a rollback of US AI chip export controls under President Trump and DeepSeek's breakthrough that shifted competition toward software innovation and open-source models. Chinese firms found workarounds to controls while advancing indigenously, and Beijing continued to expand support for the semiconductor sector. In 2026, US policy may pivot from export controls toward broader tools to extend US spheres of influence and constrain China's, amid intensifying competition across the AI stack. It will also be an acid test for China’s tech rally, as companies must deliver earnings that justify elevated valuations. This report outlines the top AI and semiconductor themes to watch in 2026.
Gavekal Technologies: Chips
Open Door And Chip Self-Sufficiency
Laila Khawaja
18 Dec 2025
China plans new chip subsidies, top officials meet AMD chief and China sees rising chip exports
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China’s Tech Power—And Its Limits
In 2025, the world learned to take China’s tech power seriously: the DeepSeek moment, the increased dominance of Chinese electric vehicles, a biotech boom and a trade surplus of over US$1trn all went to show that China is now a technological leader. Yet just as many used to underestimate China’s tech prowess, we are now at risk of exaggerating it. China’s strengths are real, but not unlimited. The theme of our final Briefing for this year is the constraints on Chinese technology power, in semiconductors, new energy and a wide range of sectors where catch-up is slow and global incumbents still enjoy many advantages.
What The End Of The H200 Ban Means
Trump ends the ban on H200 chips; Beijing wants more AI toys; Japan denies photoresist curb
The Successes And Failures Of US Export Controls
Since 2019, Washington has implemented a series of technology export controls on China with the broad objectives of slowing its ability to develop advanced AI and build an indigenous semiconductor ecosystem. The idea is to to protect US national security given AI’s dual-use nature, and to preserve US technological leadership. These measures take the form of country-wide and entity-specific restrictions. They cover exports of advanced chips, semiconductor manufacturing equipment and materials, and US-person support services, with extraterritorial reach for some items.
Do Export Controls Work?
China’s technology companies face two big external obstacles to progress. Semiconductor companies and AI developers have to deal with US export controls while electric vehicle and green energy companies are up against protectionist barriers. But how effective are these barriers really?
China’s AI Views: Hype And Reality
Nvidia’s GPU depreciation in China; Alibaba to ramp up AI spend; Moore Threads is not the Nvidia of China.
Assessing Geopolitical Risks
US hawks target Alibaba over military ties. The Nexperia dispute’s supply chain effect. Applied Materials' China revenue warning.