EDA software will be the next battlefront in the US-China chip war.

EDA Software is part of a small but powerful semiconductor supply chain, and is largely controlled by three Western companies. This gives her a powerful leverage point similar to the way she sought to limit access to lithography machines last month. So how come the industry is so US-centric, and why can’t China just develop its own alternative software?

What is EDA?

Electronic design automation (also known as electronic computer-aided design or ECAD) is a specialized software used in chip manufacturing. It’s like CAD software used by architects because it handles billions of tiny transistors on an integrated circuit.

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There is no single major software program that represents the best in the industry. Instead, a series of software modules are often used throughout the entire design flow: logic design, debugging, component layout, wire routing, time and energy optimization, validation, and more. Because modern chips are so complex, each step requires a separate software tool.

How important is EDA to make the chip?

Although the global EDA market in 2010 While it is estimated to be around $10 billion by 2021, it makes up a small fraction of the $595 billion semiconductor market, which is of particular importance to the entire supply chain.

The semiconductor ecosystem today can be viewed as a triangle, says Mike Demler, a consultant with more than 40 years in the chip design and ADA industry. In one corner are detectors or chip manufacturers like TSMC; In another corner are intellectual-property companies like ARM that make and sell reusable design components or layouts. And in the third corner are ADA devices. Together, all three ensure that the supply chain moves smoothly.

From the name, ADA tools may seem like they are only important to chip design firms, but they are used by chip manufacturers to verify the feasibility of a design before production. There is no way for a foundation to be an example of a chip; It has to invest in time and production months, and every time, hundreds of chips are created based on the same semiconductor. If they are found to have design flaws, it will be a huge waste. Therefore, manufacturers rely on a special EDA tool to do their own verification.

What are the leading companies in the EDA industry?

Only a few companies sell software for each chip manufacturing process, and they have dominated this market for decades. The top three companies – Cadence (American), Synopsis (American) and Mentor Graphics (American but acquired by the German company Siemens in 2017) – control about 70% of the global EDA market. Their dominance is so strong that many ADA startups focus on one niche and then sell themselves to one of these three companies, further strengthening the oligopoly.

What is the US government doing to limit EDDA exports to China?

The influence of US companies in the EDA industry makes it easier for the US government to clamp down on Chinese access. In his recent announcement, he pledged to add certain EDA equipment to the list of prohibited technologies. The US is cooperating with 41 countries, including Germany, to implement these restrictions.