The U.S.-China technology standoff — some call it decoupling — is going strong. The latest development has to do with semiconductors, one area in which the U.S. is still ahead of China. A top Chinese semiconductor firm, Semiconductor Manufacturing International Corp., announced Tuesday that it plans to raise nearly $3 billion on a mainland Chinese stock exchange — the point being to narrow the gap.

This industrial war is related to China’s controversial telecom titan, Huawei. 

The U.S., South Korea and Taiwan make the world’s leading-edge semiconductors, or silicon chips. They’re a teeny-tiny 5 nanometers small. That’s the size of two strands of human DNA.

But China’s SMIC wants to catch up, aided by the billions of dollars from investors. Still, analyst Paul Triolo at the Eurasia Group says SMIC has a ways to go.

“Here’s the problem: SMIC is sort of stuck at 14 nanometers. They can probably get to 10 nanometers with existing equipment and R&D,” he said.

That’s not micro enough for high-end phones and telecom gear made by the Chinese behemoth Huawei.

Huawei relies on imported chips from factories using U.S. equipment, which the Trump administration plans to cut off from China in a new regulation.

“If the export control is watertight, and if there are no smart lawyers on Huawei’s side who find loopholes, then Huawei is indeed cut off,” said Jan-Peter Kleinhans, who focuses on the intersection of global semiconductor supply chains, IT security and geopolitics at the German think tank SNV.

Hence the need for China to bolster SMIC. Not only for Huawei, but for catching the U.S. and powering the devices of the future. SMIC, though, has its own issues, according to researcher Dan Wang in the Beijing office of Gavekal Dragonomics.

“SMIC, in order to keep advancing, requires the purchase of substantial amounts of U.S. technology,” Wang said. “So if the U.S. declines to sell these goods, SMIC still isn’t in a very good position.”