Geopolitics & Sovereign Positioning

China is projected to control 42% of global wafer fabrication capacity for mainstream processes by 2028, according to data presented at Semicon China, the world's largest chip industry trade show, as reported by South China Morning Post. Industry executives identified agentic AI and advanced packaging technology as primary growth drivers. Separately, Shenzhen published a three-year action plan targeting a leapfrog increase in AI server supply chain production capacity by 2028, focusing on semiconductors, storage, and intelligent computing clusters, according to SCMP.

This capacity expansion indicates US export controls are not preventing China from scaling production in mature and mainstream process nodes, though restrictions on cutting-edge lithography equipment remain binding constraints for advanced logic chips. The strategic focus on advanced packaging—where multiple chips are integrated in sophisticated configurations—represents a potential route to system-level performance improvements without relying on restricted extreme ultraviolet lithography. Shenzhen's municipal action plan reflects coordination between provincial industrial policy and national self-reliance objectives, with local governments serving as implementation vehicles for semiconductor indigenisation.

Tencent integrated a ClawBot plug-in into WeChat, giving the app's over 1 billion monthly active users direct access to OpenClaw AI agents, as reported by South China Morning Post. Nearly every major Chinese tech company has announced OpenClaw-based offerings in recent weeks. Concurrently, Liu Liehong, head of China's National Data Administration, announced plans to strengthen AI security safeguards and establish a new data property rights framework, citing security and compliance challenges from rapid AI adoption across industry and daily life, according to SCMP. The announcement came at the China Development Forum as authorities continue issuing warnings about OpenClaw risks.

The simultaneous commercial acceleration and regulatory response reflects Beijing's standard approach to transformative technologies: allow rapid market development while establishing control frameworks to prevent political or security externalities. The integration into WeChat—China's most ubiquitous platform for messaging, payments, and government services—represents a significant state in autonomous agent adoption, creating dependencies that could be leveraged for surveillance or control. The promised data property rights framework likely aims to clarify liability and establish monitoring mechanisms rather than restrict deployment, as China seeks commercial leadership in agentic AI while maintaining regime prerogatives.

Alibaba's Damo Academy research arm unveiled the XuanTie C950, a RISC-V based CPU core designed for high-performance cloud computing and AI computing tasks, targeting AI agent workloads, as reported by South China Morning Post. The chip represents the latest flagship in Alibaba's XuanTie RISC-V series, which relies on open-source architecture rather than proprietary ARM or x86 designs. The announcement came at Alibaba's annual ecosystem conference in Shanghai, positioning RISC-V as foundational for agentic AI infrastructure.

RISC-V represents a strategic hedge against potential restrictions on ARM architecture licenses and x86 intellectual property, both controlled by Western entities subject to export control regimes. While RISC-V cores currently lag ARM and x86 in performance and ecosystem maturity for high-end applications, Chinese investment in the architecture creates an alternative development pathway not dependent on foreign licensing. Alibaba's focus on AI agent workloads suggests optimisation for inference and orchestration tasks rather than training, where performance gaps with restricted Western chips are less critical. This architecture diversification reduces the effectiveness of potential future restrictions on CPU intellectual property.

Six of Southeast Asia's eleven nations are pursuing semiconductor industry roles, but with divergent strategies and capabilities, according to analysis in The Diplomat. The fragmentation reflects competing Chinese and Western investment approaches, with nations attempting to position themselves as neutral manufacturing sites while avoiding dependency on either bloc. The article examines which countries are achieving substantive capabilities versus symbolic participation.

Southeast Asia represents contested territory in semiconductor supply chain competition, with the region offering labour cost advantages, proximity to Asian markets, and potential geopolitical neutrality. However, the lack of regional coordination means countries are competing with each other for similar positions in the value chain rather than developing complementary specialisations. This fragmentation benefits neither China nor Western nations seeking to build resilient alternative supply chains, as individual Southeast Asian countries lack the scale to substitute for Taiwan or compete with China's coordinated national approach. The outcome will likely be determined by which external powers offer the most compelling packages of technology transfer, financing, and market access.