China’s push toward semiconductor self-reliance has reached a critical milestone. Huawei and Xiaomi, once heavily dependent on foreign chipmakers, are now deploying in-house components in new devices—despite ongoing U.S. sanctions aimed at limiting their technological growth.
Their recent moves suggest that Washington’s embargo strategy may have not only failed to restrain Chinese progress but also triggered a rapid acceleration in local innovation.
The trade and technology standoff between the United States and China took a sharp turn in 2019, when Washington imposed wide-ranging sanctions on Chinese firms, barring access to American technology providers such as Qualcomm and Intel. These restrictions were expected to undermine China‘s chip ambitions by cutting off the supply of advanced components necessary for manufacturing high-performance semiconductors.
Instead, the sanctions appear to have sparked a government-backed campaign for domestic self-sufficiency. Billions of yuan have since been funneled into semiconductor R&D, education, and production. This shift, backed by industrial policy and strategic funding, is beginning to deliver tangible results—most notably through the resurgence of Huawei and the expansion of Xiaomi into chip design and integration.
Huawei’s Unexpected Return With the Mate 60 Pro
In August 2023, Huawei introduced the Mate 60 Pro, equipped with the Kirin 9000S processor, a chip designed internally and manufactured by Semiconductor Manufacturing International Corporation (SMIC). According to Indian Defence Review, this development marked the first time since U.S. sanctions were imposed that a Chinese company launched a high-performance device powered by a domestically produced chip.
The release of the Mate 60 Pro surprised both industry experts and policymakers. While the processor does not match the cutting-edge 3nm or 5nm technologies used in Taiwan or South Korea, its existence highlights China’s growing capacity to produce advanced components under constrained conditions. As noted by observers cited in the review, the launch not only demonstrated technical progress but also sent a strong message about China’s adaptability in the face of international pressure.
Xiaomi Moves Into Chip Development
Parallel to Huawei’s efforts, Xiaomi has also begun to internalize its semiconductor capabilities. The Beijing-based company is now producing specialized chips used in smartphone subsystems, such as camera processing and power management. These components, although not central processing units, play a crucial role in device performance and reliability.
Xiaomi’s approach reflects a broader strategy among Chinese tech firms: diversify internal capabilities to reduce dependence on foreign suppliers. This move is seen as a significant early step toward a more robust and autonomous domestic tech ecosystem. The company’s investments in internal R&D align with a national trend of technological realignment, encouraged by Beijing’s long-term policy goals.
Reshaping China’s Semiconductor Ecosystem
China’s response to external restrictions has gone beyond financial support. The country is restructuring its entire semiconductor framework to include domestic toolmakers, national computing standards, and alternative chip architectures. According to Indian Defence Review, one of the most notable pivots has been toward RISC-V, an open-source architecture not controlled by Western companies.
In addition to supporting new design methodologies, China is investing in infrastructure for chip packaging, photolithography, and equipment retro-engineering to substitute for technologies that remain out of reach due to export bans. Government support also extends to academic and institutional programs aimed at training the next generation of chip engineers, reinforcing the ambition for long-term “technological sovereignty.”
