70% of the profits are generated by older processes, not sub-14nm, and so are perfectly well serviceable using mature DUV litography which is much easier to "copy". But even there, subsidies did not yield much progress.

On the other hand, new energy vechicles are... well... new. There is no mature ecosystem to copy, a lot of things have to be newly developed. In this sector, subsidies have been massively successful.

The problem is mainly one of market pressure, not one of technical ability. Chinese semiconductor companies wanted the best suppliers, so they chose international suppliers rather than domestic suppliers. Domestic customers didn't buy from domestic chip designers. Domestic chip designers didn't manufacture with domestic fabs. Domestic fabs didn't use domestic equipment. As a result, domestic suppliers never got enough customers to practice and improve their processes, which is why they remained low-quality. It was a vicious circle which the Chinese govt tried to solve for years without much success. Then US sanctions came and all of a sudden, Chinese semiconductor companies had no choice but to work together with domestic suppliers: it was either shitty domestic suppliers or die. Nowadays you see domestic semiconductor equipment companies have something like 150-200% growth YoY, something which they previously could only have dreamt of. Domestic DUV litography was at 65+nm for a long time but now 24nm DUV litography (still good for ~60+% of market demand) is around the corner because they finally get enough practice.

People ascribe too much to this simplistic view of China only being able to copy or that copying is easy, and totally underestimate economic pressures.

Yes subsidies are meant to help domestic companies until they can compete with the incumbent. This strategy has been used by other countries as well.

Those who protest such subsidies are usually the incumbent, who would like to see no subsidies so that they can easily crush startup competitors.