Photo:IC

Intel Capital, the venture arm of chipmaker Intel Corp, has invested in two Chinese startups in the semiconductor sector as part of its latest batch of deals, the company announced on Wednesday.

The investments in companies that compete in fields typically dominated by US players come as Intel remains embroiled in tensions between the US and China over chip manufacturing.

ProPlus, one the Chinese startups Intel Capital has funded, makes EDA software that chip makers use to design their products before manufacturing them.

The leaders in that field — Cadence Design Systems Inc, Mentor Graphics, and Synopsys Inc — all hail from the US.

ProPlus Chairman and CEO Liu Zhihong once worked as a VP at Cadence Technologies while its director, Chenming Hu, once served as the CTO of Taiwan Semiconductor Manufacturing Co (TSMC).

Spectrum Materials, based in the southeast China's Fujian Province, makes gases critical for semiconductor fabs to produce physical chips. The sector is typically dominated by players in the US, South Korea, and Japan.

Chinese government has committed billions of dollars to help fund the domestic semiconductor industry, which it views as critical to catching up with the US and other governments.

The stakes for such initiatives have increased after the US imposed restrictions on American companies supplying to Huawei, China's top telecommunications equipment provider and a leading chip maker.

Intel Capital has consistently invested in Chinese startups along with small chip companies from around the world. 

In 2019 and 2018, it announced investments in two Chinese chip startups.

This batch of announced investments comes days after Intel CEO Bob Swan wrote a letter to the US Department of Defense expressing readiness to build a chip fab in the US, with the goal of ensuring US technological leadership.