Taiwan Semiconductor Manufacturing Co (NYSE:TSM) has significantly outperformed China’s largest chipmaker, Semiconductor Manufacturing International Corp (SMIC), this year, highlighting Beijing’s challenges in advancing its domestic chip industry. Despite China’s substantial semiconductor investment fund, Big Fund III, aimed at boosting local industry, SMIC needs to work on technological advancements, Bloomberg reports. China can produce 7-nanometer chips but aims to progress to 5nm amid U.S. export controls. TSMC, however, uses advanced extreme ultraviolet lithography to manufacture 3nm chips…