They are behind on lithography machines. LogicFolding seems like one way to overcome that, but for now HiSilicon is 18-24 months behind Apple and Qualcomm in performance. I will believe the promised gains when they are delivered, and I'm hopeful that a Chinese company figures out how to make EUVs. In a sense being only behind by 18-24 months is a win for Huawei and China, Biden's goal was to keep Huawei at 2014 levels. In another Huawei phones and tablets still lose on performance in comparisons and they aren't cheap. Xiaomi has also contracted TSMC to make its Xring chip, not SMIC. Of course cutting edge nodes are not necessary for all applications, certainly not for military applications which is the alleged reason behind the US ban. My laptop uses NVMe by YMTC and I wouldn't tell the difference or care if it were 14nm or 28 nm or otherwise.

Chinese manufacturers such as Honor and Xiaomi have Chinese and Global versions of their handsets. My Honor Magic V5 runs Android based MagicOS and has access to Google Play and other Google services. Huawei phones sold here still come with AOSP^?^ based EMUI, I'm not positive on whether it has Google Play and other Google services or not^*^, but you can install them using packages such as MicroG.

* Wikipedia says not:

On 14 July 2026, Huawei unveiled EMUI 16 alongside the Pura 90s Pro and Pura 90s Pro Max at a global launch event in Kuala Lumpur, Malaysia.[43][44][45] Based on Android 16, it launched in international markets without Google Mobile Services.[46][47][48]

Sorry, I meant for big businesses like Microsoft and then the major cloud providers. I do hope the world wises up and develops their own solutions in the future. US companies are not to be trusted.

I think Germany and Italy might be able to beat them there...

If you changed it to 'Ugly gas guzzlers that are banned in EU for pedestrian safety reasons' then they're in with a chance (but Japan will still beat them with the Delica D5)