Homegrown data processing units, or DPU semiconductors, are expected to be at the forefront of China's efforts to reduce dependence on foreign chip companies and bolster independent production of vital components, according to the founder of a leading tech startup.

"China lags behind developed countries in the manufacture of previous generations of chips. But when it comes to DPU chips, it is on a par with the rest of the world," said Yan Guihai, founder and CEO of Yusur.

"The country has the world's strongest internet industry with the largest group of netizens and related infrastructure. This has led to a huge demand for computing power and created huge development opportunities for DPU products," Yan said.

According to Yan, unlike the well-known central processing unit that does general-purpose computing, DPUs have been designed to process data that get moved around the data center.

"DPU, as a newly-developed dedicated processor, is seeing rapid development as the data surge has created huge demand for computing delay, data security, and virtualization tech. Unlike other semiconductors, DPUs can help solve problems related to these sectors," he said.

Yusur, which is backed by the Institute of Computing Technology of the Chinese Academy of Sciences, has been developing DPUs based on its self-developed Kernel Processing Unit architecture. Its related products and solutions have been applied in several scenarios like fast financial transactions and risk control.

The move toward self-reliance comes amid Sino-US trade friction, which has bolstered investments from Chinese entrepreneurs in the domestic chip industry.

Last year, investors poured more than 200 billion yuan ($30.9 billion) into the chip sector. It was much higher than the 70 billion yuan or more seen in 2019. Venture capital firms, private equity firms and IPOs of startups were the main sources of funding for the sector.

The country's annual tone-setting Central Economic Work Conference in December highlighted the importance of technological innovation to solve major problems that restrict the nation's economic development.

The conference said China will ensure better implementation of key projects targeting breakthroughs in key technologies and solutions to bottleneck problems, while encouraging businesses to focus on their areas of strength and forge new cutting-edge technologies.

Driven by the huge demand for chips, the company's order book has been swelling, while chip output has already hit a record in the first quarter of this year, Yan said.

When it comes to DPU chips, the company is pitted against big global names like Intel, Nvidia and Broadcom, all of whom are using the Arm architecture.

"Unlike these firms, Yusur uses heterogeneous computing, which refers to systems that use more than one kind of processor or cores," he said.

Zhang Yansheng, chief researcher at the China Center for International Economic Exchanges, said: "It is a clear sign that China, starting from this year, is keen on boosting its self-developed technological prowess."