Electronic design automation (EDA) software tool industry is becoming an important breakthrough area for China to solve the problem of short board in the chip industry chain.
The global market size of this industry is less than 10 billion US dollars, the net profit margin is less than 15%, but it can move the semiconductor industry chain of 500 billion US dollars, which is regarded as a major opportunity by China’s pioneers.
In March 2020, Wang Libin, deputy general manager of China region of EDA giant Synopsys, decided to resign after working in EDA industry for 20 years. He founded a domestic EDA company “xinhuazhang” and served as the founder, chairman and CEO of the company.
He told Ti media app that there were two reasons for leaving Synopsys to start a business:
First, seeing that the state strongly supports the “domestic substitution” of EDA industry, he is very optimistic about the future prospect of EDA technology;
Another reason is that he believes that the past 20 years of upstream and downstream industry experience and market relations, as well as the understanding of customers’ ideas and needs, can help xinhuazhang achieve commercialization.
Similar to Wang Libin’s entrepreneurial experience are Liu Zhihong, chairman of Gelun electronics, Dai Wenliang, co-founder of Xinhe technology, and Li Yanfeng, founder and CEO of Boda micro. All of them have held important positions in cadence, one of the three giants of EDA, and then resigned to establish a domestic EDA company.
On October 16 last year, with the government’s guidance and financial support, the “xinhuazhang” founded by Wang Libin announced that it had won 100 million yuan of pre-A round financing; on November 9, it completed nearly 100 million yuan of pre-A + round financing; on December 9, it completed more than 200 million yuan of a round financing, with an interval of less than one month. In the three rounds, Yunhui, Zhenge, Gaorong, Gaoling, Wuyuan capital (formerly Chenxing capital), Zhongxin Juyuan, Songhe and other well-known funds were introduced.
In addition to xinhuazhang, many domestic EDA companies have gathered funds this year. In April 2020, Gelun Electronics announced that it had completed several hundred million yuan of round a financing; in September, Guowei silxin, a subsidiary of Guowei group, announced that it had completed several hundred million yuan of financing, with investors including Xinxin financial leasing, Shanghai semiconductor equipment and materials industry investment fund and other government investment institutions.
The rise in capital is not accidental.
Back in May 2019, the U.S. Department of Commerce said that Huawei was fully restricted from purchasing semiconductor components produced by U.S. software and technology. Affected by this, the cooperation between the three giants of EDA and Huawei has been terminated.
The three overseas EDA giants refer to Synopsys, cadence and mentor, which occupy more than 64% of the global EDA market share.
EDA tool is an indispensable component in IC design, and it is also the most upstream and highest barrier part of IC design. It covers all processes of IC design, wiring, verification and simulation. It can be connected into a very complex circuit diagram, so as to produce a powerful CPU, GPU chip.
Under the background of the continuous evolution of AI, edge computing and other complex technologies, the 10 billion scale EDA industry is becoming an important “cornerstone” to leverage the $500 billion semiconductor industry chain, and EDA is also known as the “mother of chips” in the industry.
Therefore, the termination of Huawei’s cooperation with the big three means that the chip will not have the advanced process and domestic EDA software tools to match it, and Hisilicon will not be able to produce the next generation of “Kirin chip”. In the report, Dongxing securities described EDA as “the sword of the United States to restrict Huawei”, highlighting the importance of the technology.
Under the background that China’s chip manufacturing ecology is in urgent need of making up lessons, a game full of opportunities and risks has quietly begun.
Current situation of domestic EDA industry: slow development of technology, shortage of talents, unable to form the whole chain
According to public data, China’s EDA market will reach 540 million in 2019, accounting for only 5.3% of the world’s $10.25 billion.
As the world’s largest electronic components production and marketing market, EDA’s products account for more than 85% of the domestic market share (actually close to 90%), and domestic EDA software production and sales account for less than 10%.
At present, the domestic EDA software companies mainly include Huada Jiutian, Guowei group, xinhuazhang, Boda microelectronics, Xinhe technology, quelun electronics, etc., and the number and scale are very rare.
The main reason behind this is the high technical threshold, high cost elasticity and high concentration of EDA industry, which leads to the slow development of domestic technology, the shortage of talents and the inability to form a full chain of EDA tools. As a result, China’s IC design industry is increasingly inseparable from the three giants of EDA.
In fact, from the perspective of the development of EDA industry, China has experienced a heyday.
During the cold war, China’s EDA software technology was embargoed by “Batong”. In 1986, China successfully developed the first computer-aided design tool for integrated circuits – “panda system” (panda ICCAD system), which came out in 1993.
This marks the breakthrough of “zero” in the development of EDA system in China, breaks the blockade of EDA tools from foreign countries, and lays a solid foundation for the development of China’s IC design industry.
As soon as the panda system is released, it has aroused great repercussions in the market. As the price is only 1 / 10 of that of similar products, American chip manufacturers once chose panda system.
However, with the dissolution of Batong and the lifting of the embargo, in 1995, the three overseas EDA giants entered the Chinese market on a large scale and quickly reaped the market share with the strategies of mature technology, low price, free gift and multi-party cooperation. In addition, China has begun to actively promote the globalization of WTO, and the strategy of “making is better than buying” has made domestic EDA fall into silence for 13 years.
Although the state launched the major special plan of “nuclear high-tech base” in 2008, the first batch of domestic EDA enterprises such as Huada Jiutian and core vision were set up one after another and were given key support. But EDA is a high-tech industry with long investment cycle and low profit margin. China lacks long-term capital, talents and industrial chain support, so the development of domestic EDA is still difficult.
For example, in the past decade, Huada Jiutian has invested less than 500 million yuan in R & D. While the three overseas EDA giants have made great progress. In 2018 alone, the R & D investment of Synopsys was as high as US $1.08 billion, and cadence was about US $870 million. The total R & D investment of the two companies exceeded RMB 12.7 billion, with a huge gap.
At the acquisition level, in the field of digital EDA, the big three acquired hundreds of companies and obtained hundreds of EDA tools for SoC design mainstream.
In China, due to the late start of EDA industry, the idea of “building is better than buying” missed the opportunity to support the war in the fierce competition. Although there has been some development in Analog IC, it is almost zero in digital EDA.
At present, the domestic EDA tools are very scattered and can not provide a full set of tool chain, while the international EDA companies generally provide a full set of tools for chip enterprises.
Concerned about the semiconductor industry, some investors told the titanium media app that although the idea of domestic substitution of EDA is full, the reality is tough. In the downstream chip manufacturing process, advanced manufacturing technology is still the main theme of the market and customers. Therefore, EDA tools will still be self-sufficient and mixed with big three point tools.
The person in charge of the chip downstream manufacturer interviewed by Ti media app said that in the next 10 years, the EDA tools of the big three will still occupy the mainstream of the market, and the domestic EDA technology will not be able to keep up with the “substitution”.
As a matter of fact, there is still a big gap between domestic EDA and American EDA as a whole. In addition, new EDA, new IP, new process and PDK promote and integrate with each other, so it is difficult for the original customers to easily replace EDA software.
Therefore, the future of domestic EDA, which many entrepreneurs fantasize, has become a “bubble bet”.
Fish in troubled waters and change constantly like cloud and wave change constantly in the international arena, some domestic EDA enterprises are troubled by troubled waters, and there is a certain market bubble.
On May 19, 2020, the Shanghai stock exchange accepted the application for listing on the science and Technology Innovation Board of core vision (the full name of the company is Beijing core vision software technology Co., Ltd.), which marks the first shot of domestic EDA enterprises to charge the science and technology innovation board.
However, 227 days later, on December 31 last year, the IPO of core vision technology innovation board was terminated. The reason behind it may be that the 5.57 million invoice in arrears has not been fully returned. In addition, the company’s participation in the investment process is still suspected of violating the regulations.
In an exclusive response to titanium media, Dr. Ding Ke, chairman of core vision, said that after the termination of the audit, the company has no plans to restart the listing of the science and technology innovation board for the time being.
“The core of EDA industry is intellectual property, but domestic EDA companies don’t pay much attention to it. If you don’t pay attention, you will step on the pit. In this case, many companies will cooperate with the big three, so it’s impossible to talk about pure domestic EDA. ” The industry said to the titanium media app.
In addition, there is a big gap between China and the big three in terms of talent.
According to the public information, there are about 1500 EDA software development engineers in China, of which about 1200 work in the China R & D center of international EDA companies, and only about 300 really do R & D for local EDA. In contrast, Synopsys has more than 7000 R & D personnel, of which more than 5000 are engaged in EDA R & D. most of the core talents in the industry work in the big three.
Shuai Hongyu, CO chairman and President of Guowei group, pointed out that up to now, there are almost no EDA related training directions and EDA related courses in Chinese universities. Moreover, after 2010, there are almost no papers published in related fields in China. Only one third of the students majoring in IC industry enter the related industries after graduation, and there are few people who know and are interested in EDA.
He stressed that the main reason behind the shortage of EDA talents in China is that the “industry university research” strategy of integrated circuits has not kept up, which is the core problem to be solved in the industry.
The future opportunities of domestic EDA: 8-inch market demand, overtaking opportunities under domestic substitution, and support from Xinsi
“Although EDA market share is occupied by the big three, domestic EDA must have and will develop.” A number of industry analysts told titanium media app.
In fact, Founder Securities released a research report that although EDA tools are monopolized by international enterprises in the field of analog / digital analog hybrid / digital chip EDA, as well as in the whole process design platform, domestic EDA opportunities are more based on point tools and gradually developed from point to area.
With the shortage of MEMS (8-inch) wafers and strong demand, domestic EDA is facing new opportunities.
Ying (Chen Yingren), vice president of Shanghai Guowei silsi, told titanium media app that at present, there is a strong demand for non advanced (middle and low-end) chips in the fields of automotive electronics, FPGA, driver chip, fingerprint identification, power management, MOSFET, microcontroller (MCU) and so on. The downstream 8-inch wafer manufacturing technology is very mature, and the market demand exceeds supply. Therefore, this market has great potential and is the core driving point of domestic EDA tools.
“With the prosperity of AI, 5g, industrial Internet, automotive electronics, blockchain and other fields, many distinctive IC design requirements that have not been met by EDA tools are put forward, which is just a new opportunity for domestic EDA tool manufacturers.”
Silxin is a local EDA company in the field of prototype verification and simulation system. It was acquired by Guowei group in October 2018, and the name of “silxin” was changed to “Guowei silxin”.
Chen Yingren stressed that although in the aspect of advanced process IC design, EDA is still dominated by the three giants, domestic EDA is imperative. Especially in 40nm and 28nm process, Chinese enterprises have mastered or will soon grasp it. “The function verification of silion is at the front end, which is relatively independent of the manufacturing process. Especially in rapid prototype verification, silxin has 17 years of accumulation, comparable to the three giants of EDA. “
This is also a corner overtaking opportunity for Chinese enterprises under the domestic substitution.
Wang Libin told Ti media app that at present, in terms of artificial intelligence and cloud technology, domestic EDA can stand at the high-tech starting point of today’s scientific and technological development, and innovate, integrate and reconstruct EDA software and hardware framework and algorithm. He believes that it is difficult to innovate for a long time under the monopoly of the three giants, while the domestic EDA enterprises are in a state of “light loading” and it is “entirely possible” to surpass the world giants.
In order to cope with the international situation and the challenges of EDA giants, domestic enterprises are constantly acting frequently.
In 2019, at the most influential DAC conference in the global electronic design field, four Chinese EDA manufacturers, namely Huada Jiutian, guangliwei, qulun electronics and Xinhe technology, will join hands to launch a number of EDA products, showing the Chinese power in EDA field to the world.
At the end of the same year, Gelun electronics acquired bodavi to further integrate superior resources. And blue ocean micro strives to find niche customer groups, avoid the Red Sea and look for blue ocean.
In addition, the giants are also increasing the layout of China, constantly promoting localization, “industry university research” support, and forming more considerations by supporting domestic EDA.
In 1994, Synopsys donated 20 sets of design compiler software to Tsinghua University at the Great Hall of the people, with a total value of about US $5 million. Subsequently, the company and Tsinghua established “Tsinghua University – high level electronic design center of Xinsi technology” to promote the cultivation of EDA talents in China.
In 2018 and 2019, Synopsys set up two joint ventures, xinsiyuan and full core intelligent manufacturing, respectively. The former aims to strengthen local cooperation in the field of chip IP, help local Fabs and design enterprises to achieve independent R & D and master core technologies; the latter aims to strengthen local cooperation in the field of manufacturing EDA and drive domestic technological capabilities.
Ge Qun, senior vice president and chairman of Synopsys in China, told titanium media that all the efforts made by Synopsys are aimed at solving the pain points of China’s chip industry, whether it is personnel training, technical support or capital cooperation. This is the original intention of Xinsi and other domestic EDA companies.
Ge Qun stressed that at the time of the transformation of China’s digital society, Xinsi will enable more scientific and technological applications with a new generation of EDA root technology oriented to the future, and promote the sustainable development of the entire chip industry. “EDA industry needs to get through the internal and external circulation, the whole industry chain promotes each other, and forms a complete ecosystem, which will have better development space.”
From the current point of view, the war of EDA “domestic substitution” seems to continue.
Editor in charge: Tzh