What many people do not know is that the chip industry is closely linked to another sector, which is “Electronic Design Automation” or Electronic Design Automation, known as EDA. Behind every advanced electronic chip, there is the EDA sector, which is the vital link that combines the initial idea and the actual design of chips. .
Although the EDA sector represents only 1.6 percent of the size of the global chip and semiconductor industry, which is worth $600 billion, this sector is considered a “bottleneck” in the chip development process, as “electronic design automation” programs allow the development and testing of new generation schemes. of chips before putting them into production.
American hegemony and Chinese suffering
According to a report prepared by the Financial Times and viewed by the Sky News Arabia website, three companies are headquartered US The global EDA sector is dominated by Synopsys, Cadence, and Siemens EDA. Together, these companies produce all the software required to design, produce, and test the most advanced chips. This is what puts the Chinese chip industry under tremendous pressure and makes it struggle to break the American “noose” imposed on it, with the American EDA tools subject to them. Export controls imposed by Washington on Beijing.
According to consulting firm ICWise Research, the three American companies, namely Synopsys, Cadence, and Siemens, control nearly 80 percent of the EDA market in China, while Beijing is trying to make up for lost time, after it was slow to realize its weakness in the face of American controls in the EDA sector, according to Lu Xiaoming. Director of Eurasia Consulting Group.
In 2019, the administration of former US President Donald Trump banned Huawei from using US EDA tools, and in August 2022 the administration of President Joe Biden blocked China from accessing the most advanced chip design software. US restrictions mean that Chinese chip designers cannot produce advanced chips designed with US EDA tools.
Despite Chinese efforts to support EDA companies in the country through government subsidies, the progress achieved in this field has not been of the required size. The three leading EDA companies in China, Empyrean Technology, Primarius, and Semitronix, have doubled their share in the local market from 7 percent to 14 percent. percent between 2020 and 2023, while the share of these companies in the global market did not exceed 2 percent, according to Insight and Info.
His research revealed Goldman SachsIn order to keep up with global leaders, the EDA sector in China will need to spend $9 billion on research and development every year, 29 times more than what China spent in 2023, over the next ten years, says Jamie Goodrich, senior advisor to the EDA Foundation. RAND Technology Analysis said that the Chinese EDA sector suffers from its inability to provide tools for developing modern chips, noting that the American EDA tools for manufacturing old chips are still available to Chinese companies.
China had identified supporting the EDA sector as a top priority, within a five-year economic plan it issued in 2021.
Under this plan, the state-backed Integrated Circuit Industry Investment Fund and Huawei invested millions of dollars in EDA startups in China.
Last year, China also opened a national innovation center in the EDA sector in the city of Nanjing, and one of the goals of this center is to break the grip US On the EDA sector.
What is the EDA sector and what is its importance?
Technology specialist Dadi Geagea said in an interview with “Iqtisad Sky News Arabia” website, that in a world where the complexity of technology is increasing, the electronic design automation sector, or EDA, is considered the backbone of the chip and semiconductor industry. This sector plays a role in transforming ideas into tangible products, as The concept of the EDA sector is based on providing necessary programs that enable engineers to design and manufacture chips accurately and efficiently.
According to Geagea, companies operating in the EDA sector are tasked with providing a variety of software products that allow engineers to plan and design the electrical circuits involved in the manufacturing process of electronic chips and analyze their performance. Through these tools, engineers can conceptualize and test the capabilities of new designs and simulate their capabilities in environments. Virtualization of fault detection at early stages before the start of the manufacturing process, which fosters innovation, reduces errors, reduces costs and speeds up production.
Geagea explains that the programs and tools provided by companies operating in the EDA sector perform multiple tasks. They help engineers identify potential problems in the chips before starting manufacturing. These tools also analyse, evaluate, and test the electrical and thermal performance of the chips, ensuring that they meet the required standards, pointing out: The EDA sector is the key to making chips. A painter, for example, cannot implement the idea inside his head unless he has the drawing tools and paints to make it, just like chip manufacturers who cannot make a chip without the tools provided by the EDA sector. It is true that the size of this sector represents a percentage of 1.6 Only percent of the world’s chip and semiconductor industry, but this percentage is enough to stop the industry as a whole.
China is in a weak position
For his part, technology analyst Joseph Zogheib said in an interview with the “Eqtisad Sky News Arabia” website that the United States’ control over the electronic software design (EDA) sector in the world has a significant impact on China, as Chinese companies rely heavily on American EDA tools, and when Washington decided to block… By restricting the access of some of these tools to Beijing, the latter is in a weak position in the field of producing advanced chips that are used to run artificial intelligence programs, as without access to the latest EDA technologies, new designs cannot be developed in the world of chips.
Zogheib explains that the problem that China suffers from in the EDA sector has made it lag behind international competitors in this field. For companies working in the field of chip production that need to use EDA technologies in their work, it is easy for them to turn to the American companies Synopsys, Cadence, and Siemens, and buy everything they need. Of programs and products from one place, but if chip producers want to deal with Chinese companies in the EDA sector, they will have to work with twenty different companies to purchase all the required tools, and this matter is complicated and producers do not like it, as it is expensive and leads to delaying the manufacturing process due to the need to Linking several software tools together.
Breaking the American noose
Zogheib reveals that China is struggling to break the American “stranglehold” on the EDA sector, by expanding the scope of its influence in global markets, and therefore it is implementing several major strategies, most notably increasing investment in research and development, as the Chinese government supports local companies by providing financing and grants. To develop its own EDA technologies, in addition to encouraging cooperation between universities and emerging companies in the field of technology, which contributes to developing local competencies in chip design. China is also attracting engineers and experts in the field of EDA from abroad, especially from developed countries.
According to Zogheib, China seeks to achieve self-sufficiency in the EDA sector to ensure the sustainability of its growth in the chip industry, and this is inevitable for it, as its success in this field could lead to changes in trade relations with other countries, especially the United States, which will seek With all its might, it aims to obstruct any Chinese progress made in the chip design and manufacturing industry.