Yes. They are so far behind cause they’ve always been able to just buy chips for far less money than making them. Now we have taken away their ability to buy chips, and they have no choice but to learn to make them or get left behind. They have made it extremely clear that they have chosen the former.
That will still never work though, Chinese manufacturing blows American out of the water. They will surpass us very soon unless America fully blocks the import of their chips, just like we did with their electric cars, which are vastly superior to ours.
The irony here is that blocking China from importing certain chips will do little except pressure them even more to develop their own chip manufacturing industry, which is already growing fast
Their chip capacity hasn’t grown cause they’ve always been able to buy chips. They can’t anymore, so the incentive to develop that tech is higher than ever. And they have plenty of manpower