Shanghai Starfive Technology’s chips are based on RISC-V, which, unlike Intel’s x86 and Arm, is an open-source design that’s not controlled by a Western company.
China has for years been trying to wean its crucial semiconductor industry away from Western technology. China, like most of the world, uses computer chips based on architectures from the Silicon Valley pioneer Intel or U.K.-based Arm. Its push for semiconductor self-sufficiency is becoming increasingly urgent amid its worsening relationship with the U.S.
Amid the near-daily geopolitical chaos, a little-known Chinese startup backed by Hong Kong billionaire Peter Lee has been making steady progress in developing a computer chip that’s not dependent on a Western company. In fact, it’s not dependent on any company—its chips are based on an open-source design called RISC-V.
Unlike the Silicon Valley mindset of move fast and break things, the Shanghai-based startup, called Starfive Technology, is taking a careful and calculated approach. Starfive started out with what it calls an easy win—a RISC-V chip for smart gas meters, designed for automatic gas usage data collection. It makes sense as one of Lee’s companies is Hong Kong & China Gas, a piped-gas supplier in Hong Kong and mainland China. Starfive says Hong Kong & China Gas, better known as Towngas, already bought 4 million of its smart gas meter chips since its launch in late 2022.
Next, Starfive has set its sights on the booming data center sector. The six-year-old startup developed a RISC-V chip for data center management and is slated for mass production later this year. Starfive has already found a major customer for its data center management chips in the form of Xfusion Digital Technologies, a spinoff of Chinese tech titan Huawei Technologies.
“So far I have no knowledge of other RISC-V-based chips that are similar to our data center management chip,” says Starfive’s founder and CEO, Thomas Xu, a veteran semiconductor designer who’s worked at HP and was previously CEO of Brite Semiconductor. “We are commercially competitive.”
Starfive is among China’s earliest RISC-V chip designers—a space now joined by the likes of Alibaba (through its chip unit T-Head) and Huawei (through Hisilicon). The architecture is used to design chips for everything from smartphones to AI tools such as ChatGPT, though the performance of RISC-V chips still lag behind those based on Intel’s x86 and Arm’s namesake.
Since it’s open-source and run by a Switzerland-based non-profit foundation, RISC-V is viewed by China as a crucial means to reduce reliance on Western technology. It comes as the country is facing the U.S.’s widening restrictions on its access to advanced chips and equipment. China is set to issue policy guidance to encourage the use of RISC-V chips nationwide for the first time, according to a Reuters report in March.
Starfive was established in 2018 with seed funding from Full Vision Capital, the family office of Lee, who’s the co-chairman of Hong Kong’s Henderson Land Development. In an interview with the Chinese General Chamber of Commerce in 2020, Lee shared that he convinced Sifive, a U.S. chip designer whose team invented RISC-V, to set up a division in China, which later became Starfive.
“At that time, I explained to them that the conflict between China and the U.S. will only get worse in the future,” Lee said in the interview with the Chinese General Chamber of Commerce. “If the two economies decouple from each other, it will be an opportunity for Sifive since Intel and Arm will no longer be able to enter China. I succeeded in convincing them to invest in China.”
Lee’s bet was proven right. Starfive’s early-mover advantage has garnered investor interest, with government-owned Hong Kong Investment Corp. in March making an undisclosed investment in the startup. Its other backers include Chinese search engine behemoth Baidu, SBVA (formerly SoftBank Ventures Asia), Chinese investment fund Chengwei Capital and state-backed China Internet Investment Fund.
While other RISC-V chip startups are targeting the most lucrative area of chips—artificial intelligence—Starfive is focusing on steadily building up its technology and chip portfolio. Starfive wants to “learn to walk before it runs” and avoid creating “an equity fantasy” by jumping on the AI bandwagon, says Alan Chan, managing partner of Full Vision Capital and chief investment officer of Towngas.
Chan points to Starfive’s smart gas meter chips to Towngas. “The smart gas meter chip is what we call low-hanging fruit,” he says. “For customers, it is a need.”
To step up its chip designing portfolio, StarFive spent years developing its data center management chip. A microcontroller, the chip provides remote server control capabilities, allowing administrators to manage the servers’ power state, monitor system health and perform maintenance works. Starting in early 2026, Starfive will sell the chips to Xfusion, which will deploy them into servers and then distribute to either traditional or AI data centers in Hong Kong and mainland China.
Meanwhile, as China increasingly promotes RISC-V and as AI demand continues to grow, Starfive is busy processing proposals from companies. Among them was a more than $100 million offer to develop an AI computing chip, Chan and Xu says, which they declined.
“RISC-V is good for domain specific applications, so we’ll try to stay within that area as much as possible, area with a limited ecosystem where application is clear,” says Xu. “We’ll do one product at a time.”
