• Chinese companies have spent the past four years filling gaps left by US bans
• The number of IPOs centered around semiconductors has increased
• China is also concentrating on supply chain self-sufficiency

New Morgan Stanley data cited in a South China Morning Post report has demonstrated a shift in the companies reaching China’s public markets, per the analysis of 229 IPOs on Shanghai’s Star Market between 2022 and 2026.

The number of companies targeting China’s technological ‘chokepoints’ has become much more prominent – around one in five of the IPOs fell into this category in 2026, compared with fewer than one in ten in 2022.

In other words, the SCMP claims that the number of companies addressing areas of foreign technological dependence has more than doubled in just four years.

China’s public market fills in response to US restrictions

In the four years analyzed, the so-called chokepoints have concentrated around the semiconductor supply chain following US restrictions and sale bans.

But by preventing the sale of some of its own chips and hardware, the US has fundamentally enabled China to grow its own market by giving it an incentive to develop domestic alternatives.

Morgan Stanley identified 21 companies in 2026 that were specifically targeting these shortfall areas – 19 of them were closely aligns with the semiconductor supply chain.

The investment banking giant also estimated that around 60% of the companies listing in 2026 contribute to China’s supply-chain self-sufficiency drive, up from 41% in 2022.

While some restrictions have been eased during that time period, China continues to invest heavily in this market, with continued investments across key remaining areas like raw materials and manufacturing machinery.

Ultimately, years of US technology restrictions have increasingly pushed Chinese startups towards replacing that foreign technology, and even if restrictions were to stop overnight, it’s likely that China could now be in a position not to need US hardware anymore anyway.