China-based smartphone vendor Honor established a subsidiary in Shanghai to develop chip designs, the latest domestic company looking to fill a gap caused by ongoing US restrictions on advanced semiconductors, Yicai Global reported.

In addition to designing chips, Honor’s subsidiary will reportedly develop AI application software and handle sales. It will be the former Huawei smartphone sub-brand’s fifth domestic research centre, Yicai Global stated.

Shanghai Honor Intelligent Technology Development was formed on 31 May with a registered capital of CNY100 million ($14.2 million), Yicai Global wrote, citing business data provider Qichacha.

China’s government prepared a CNY1 trillion ($142.2 billion) support package in 2022 to boost the chip industry in the face of rising US sanctions.

Huawei reportedly increased investments in a number of semiconductor specialists in early 2022 to counter the US moves.

The company sold Honor in late 2020 as the restrictions squeezed its access to chips and software.