There are companies that are competitive in CPU design. But CPU manufacturing is a bottleneck. At the low end, they lack scale (until the new factories are built). At the high end (beyond about 14nm), they either lack an independent supply chain (and are thus susceptible to sanctions) or ability (beyond 10 nm requires EUV).

Furthermore, what we're talking about here is replacing x86. There is indeed a joint venture with AMD, but at the end of the day x86 is still US intellectual property and thus susceptible to sanctions.

It would be a different matter if they decide to replace x86 wholesale with something else, e.g. ARM or RISC-V. That is certainly more feasible today than a decade ago, with Android being a major platform and no longer being constrained to just Windows. But it's probably still a large amount of effort.