China continues to look for ways to beat U.S. sanctions, as companies hire high-level U.S. executives and engineers to develop semiconductors.
According to Japanese news service Nikkei Asia, three Chinese startups established in September 2019 were either founded by or have hired U.S. executives from Cadence Design Systems and Synopsys. These two companies are considered some of the largest developers of electronic design automation ("EDA") tools.
The Chinese state-run startups include Advanced Manufacturing EDA, Hejian Industrial Software, and X-Epic.
While China has yet to match the U.S.'s chip technology, these efforts could be a long-term boon for the country as it pushes to become less dependent on foreign suppliers.
Over the course of President Donald Trump's term in office, his administration has repeatedly taken a hardline stance against Chinese technology companies. These efforts have included removing companies from U.S. indexes, calling for allied countries to halt business with Chinese firms, and more.
The biggest example of the U.S.'s efforts to regulate Chinese companies is its approach to technology firm Huawei. In May 2020, the U.S. enacted a new series of regulations preventing U.S. technology companies from selling to Huawei. These sanctions continued to grow in August as the U.S. worked to further stymie the Chinese technology giant's ability to buy semiconductors from international companies.
As a result, Huawei and other Chinese firms have worked to become more self-sufficient over the last few months. And given the country's rapidly growing market and technological dominance, it could likely succeed, as it has almost everything it needs to manufacture chips without the help of foreign suppliers.
However, while this will help China's development in the long term, the country still has a long path ahead. Competitors currently dominating the global markets include Intel (INTC), Taiwan Semiconductor Manufacturing (TSM), and Samsung.
