Giving them chips now will no longer change anything because it is too late. Now they know that they must not depend on US-controlled imports.

Before the US "sanctions", China did not make any serious efforts to develop EUV lithography, because the government did not believe that this is a priority.

After US blackmailed everybody, including TSMC and ASML, to stop providing products and services to China, the Chinese government understood the importance of being able to make up-to-date integrated circuits, so they started providing incentives for all companies willing to work in this direction.

The result is that now China claims to have working prototypes for EUV lithography and they estimate that they will begin to use EUV lithography in mass production some time between 2030 and 2032, which is a very plausible estimate.

> Before the US "sanctions", China did not make any serious efforts to develop EUV lithography, because the government did not believe that this is a priority

Possibly true, but it’s hard to disentangle this issue specifically from the broader trade war / decoupling started in the Trump I admin. Which itself predated AI as a major geopolitical issue.

I think that China was inevitably going to work their way up the stack to DUV / EUV. I agree as you say it’s plausible that the trade war accelerated their prioritization here.