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I came across a very good article about how the Chinese have been exploiting loopholes in US export restrictions on lithograhic machines. It explains in great detail how lithographic machines are used in actual production conditions:
"The latest round of export controls is a big improvement with respect to the devices Commerce seeks to prevent a select group of Chinese companies having access to. They likely block 7nm and 10nm node logic, as well as 18nm DRAM. If the resolution rule is enforced for NAND Flash, it will have a huge impact on YMTC’s memory capabilities. These rules, however, likely won’t stop China from producing 14nm node logic, which was part of their intended scope.'
The SMIC has a legitimate 7nm technology in high volume manufacturing. A tear down has been done, it is confirmed. I also do not see a reason SMIC cannot produce a 5nm logic node. SMIC has always been behind TSMC so not much has changed here.