In a move that threatens Intel’s lock on vast swaths of the computing market, the Chinese-made Loongson chip will take a giant step from netbooks to supercomputers later this year.

“Like a country’s industry cannot always depend on foreign steel and oil, China’s information industry needs its own CPU,” or central processing unit, said Hu Weiwu, the lead architect Loongson microprocessors, to the People’s Daily newspaper.

Intel doesn’t have to worry yet: It will take around 20 years before the chips designed in China will be ready for exports. But the goal is clear: China wants to sell microprocessors to the United States “just like we are selling clothes and shoes,” according to Hu.

In some sense, China already does that. Intel opened a chip manufacturing facility in China last October. As we reported, the $2.5B facility is the first Intel factory in China that fabricates microprocessors from raw silicon.

The United States places restrictions on the kinds of chips you can manufacture in China. Many high-tech companies remain worried about China’s frequent misappropriation of intellectual property. Intel doesn’t make its most advanced chips in the Chinese factory; those still come from American facilities in Arizona and Oregon.

The Chinese Loongson chip is getting more sophisticated. Until now, it has been used only on netbooks and set-top boxes. But three major government-owned scientific organizations in China, The Institute of Computing Technology of CAS, Jiangnan Institute of Computing Technology and the National University of Defense Technology (NUDT), are scheduled to use Loongson chips in their supercomputer projects by the end of this year.

Like chips from Intel and its domestic rival, AMD, Loongson chip is able to emulate the x86 instruction set, the software code used in Intel’s microprocessors which define how operating systems pass instructions to central processing units. This will make it possible to use it on regular desktop computers and, in theory, run common operating systems like Windows and Linux.

But there’s still a long way to go. Satisfying domestic demand with Loongson will take at least a decade. And the success of Loongson is not guaranteed. 2030 is a long time away — and that gives Intel and AMD decades of R&D to leap ahead.

[Via Technology Review]