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Context. China depends on the U.S. and its allies for advanced semiconductor chips and the manufacturing equipment required to make them, which leaves it vulnerable to U.S. export controls. To reduce its dependence, China has prioritized developing its domestic semiconductor industry. China is currently focusing on 28 nm chips—viewed as the dividing line between mid and high-end chips—and 14 nm chips. A recent GlobalData report states that for China, “achieving scale at 28nm this year will be highly significant in the longer-term process of developing a more complete Chinese domestic semiconductor ecosystem.”

Semiconductor Manufacturing International Corporation (SMIC) is China's leading manufacturer of semiconductor chips. It began commercial production of 28 nm chips in 2015 and 14 nm chips in 2019. Industry observers expect SMIC to ramp up its production of 28 nm chips in 2021 and of 14 nm chips in 2022.

A bottleneck for China’s indigenous production of advanced chips is the photolithography equipment needed to manufacture them. SMIC currently relies on equipment from ASML, a Dutch company, which is yielding to U.S. pressure not to sell photolithography equipment to China. But Shanghai Microelectronic Equipment is expected to have photolithography equipment capable of making 28 nm chips by the 2021 Q4.

Data and resolution details. This question resolves based on SMIC quarterly financial reports. The historical and forecasted data is revenue from 28 nm chips or smaller as a percentage of total revenue. The percentage is calculated on a four-quarter rolling basis. Forecasting for each six-month period ends halfway through the period. 

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The historical data underlying the graph is here.

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