On Wednesday, the venture arm of U.S. chipmaker Intel Corp, Intel Capital stated it has invested in two Chinese startups in the semiconductor sector.

The fresh investments comes at a time when there is heightened tensions between Washington and Beijing over chip manufacturing.

One of the Chinese startups, Intel Capital has invested is ProPlus. It makes EDA software that chip makers use to design their products before manufacturing them. These leaders in this field, which include Mentor Graphics, Cadence Design Systems Inc and Synopsys Inc, are all U.S. companies.

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

The other Chinese startup called Spectrum Materials, is in the business of producing gases that are critical for making semiconductor fabs to produce physical chips. This sector is typically dominated by players in the United States, Japan and South Korea.

The Chinese government is funneling billions of dollars into the chip sector to help its domestic semiconductor industry catch up with Western democracies.

The stakes in the sector have increased following the U.S. imposing restrictions on American companies supplying to China’s Huawei.

These fresh investments comes days after Intel’s CEO Bob Swan wrote a letter to the U.S. Department of Defense expressing readiness to build a chip fab in the United States, with the goal of ensuring U.S. technological leadership.