The China-European Union trade war is moving beyond EV and Pork probes. In the latest, the European Commission is raising concerns over its chipmakers staring at substantial losses in China. This comes as China eyes supremacy in critical technologies and the semiconductor industry with investment hikes.

Major European chipmakers could face limitations, according to Bloomberg News. The companies are not that advanced; rather, they make microcontrollers and other chips essential for key sectors of the economy, including automobiles and consumer electronics.

A European report quoted by Bloomberg reveals that discriminatory standards and other non-tariff barriers could be used to bolster China’s domestic market. Other measures involve investing heavily in components like analog and power semiconductors.

Bloomberg had earlier reported on the Chinese government instructing their domestic EV players to purchase components from local auto chipmakers. This aims to reduce reliance on Western imports and boost China’s domestic semiconductor industry.

China is reportedly spending more than $100 billion to build new chip plants. The country has significantly hiked spending after US-imposed sanctions on Chinese company’s ability to buy high-end chips. China, so far, has been able to access the US tech through backdoor channels.

Earlier Chinese President Xi Jinping urged Chinese industries to step up innovation amid confrontation with the US.