Dongfang Jingyuan Electron Ltd., a semiconductor software firm, is weighing filing for an initial public offering in China as soon as next year, according to people familiar with the matter, as the country spars with developed democracies over access to chipmaking technology.

The Beijing-based company, currently valued at about 8 billion yuan ($1.2 billion), is in the early stages of preparing for a potential listing, the people said, declining to be identified as the information is not public. The firm is considering venues for its debut including Shanghai’s Nasdaq-style STAR board, one of the people said.

Dongfang attracted global attention in 2022 when semiconductor equipment giant ASML Holding NV warned that the Chinese firm was potentially infringing on its intellectual property rights with its software. Dongfang said its operations comply with relevant laws and regulations.

Discussions are preliminary and no final decisions have been made, the people said. Representatives for Dongfang didn’t immediately respond to requests for comment by email and phone.

China is looking to support semiconductor technology companies to counter a US-led campaign to block its firms’ access to cutting-edge technologies. In 2021, Dongfang was designated as a “little giant,” referring to startups that have been selected under an ambitious government program aimed at fostering a tech industry that can compete with Silicon Valley.

Read More: Chinese Chip Rival to Samsung Seeks IPO at $14.5 Billion Value

Dongfang raised about 1 billion yuan in November 2022 from investors including Green Pine Capital Partners, Silk Road Huachuang Capital and E-Town Capital, according to its website. State-backed investment company E-Town has a wide-ranging chip investment portfolio, including a joint venture with a unit of China’s chipmaking champion Semiconductor Manufacturing International Corp. and Beijing’s so-called Big Fund, which aims to support the growth of the semiconductor sector.

Both ASML and Dongfang make optical proximity correction software, or what is known as computational lithography, which is essential in helping chipmakers manufacture the most advanced semiconductors.

ASML accused the Chinese firm in 2022 of having links to a defunct Silicon Valley company it successfully sued for intellectual property theft in 2019.

Dongfang Chairman Yu Zongchang has an outstanding arrest warrant in California on allegations of stealing trade secrets from ASML, Bloomberg News has reported. Dongfang’s second largest shareholder is a fund in which Yu is the biggest shareholder, according to data provider Tianyancha.

--With assistance from Jordan Robertson and Gao Yuan.