Interesting here is what the leading semi industrialist think of China effort to achieve self sufficiency. This discussion more or less confirm the problem that we have been discussing in this forum
Give Domestic EDA Vendors a Fair Chance
Outside of China, the stranglehold firms have on technology is not only in basic IP. At present, 95% of China’s EDA market is controlled by foreign enterprises.
Empyrean Software is the leading EDA supplier based in China. Dong noted that the EDA industry is 60 years old, while Empyrean is only 10 years old this year. China has to acknowledge there’s a gap in experience.
Dong said, “To develop China’s EDA, we must first have strategic positioning. For example, Empyrean ‘s full-market operation has hardly taken any support from the state in the past 10 years, because we firmly believe that the development of China’s integrated circuits will definitely bring opportunities to EDA.
One is to strengthen cooperation with domestic OEMs. For example, the cooperation between Empyrean and Huawei is very close. China’s IC industry demand has driven China’s own EDA innovation. This kind of industrial chain cooperation is very important.”
Xia believes that Chinese industry should not automatically support domestic EDA tools simply because they are from China. The Chinese factory must practice non-discriminatory sourcing. American companies suspect that Chinese buyers reflexively support the Chinese manufacturers, but that’s not what Chinese buyers believe. In many cases, Chinese companies are actually giving priority to foreign products because they are mature and easy to use.
It is important to develop domestically-produced tools, but the market requires that Chinese suppliers get no special support — local suppliers must compete fairly with foreign EDA tools. From the market perspective, the monopoly that foreign EDA suppliers have is not good for downstream customers. “Even for the employees of these international EDA companies, it’s hard for them to job-hop,” added Xia. “Any country should support new market entrants instead of using national boundaries to limit who can participate or not. This is good for the development of the market, customers, and the entire industry.”
Developing a competitive local EDA industry is a long-term goal. Foreign manufacturers started 60 years ago and have developed through hundreds of mergers and acquisitions. It is unrealistic to expect China can become competitive in EDA in three years. Domestic EDA manufacturers must aim at 10 years and 20 years to do it.
Production Equipment
The situation for semiconductor manufacturing equipment is similar. Advanced equipment has been banned for sale to China. If the availability of production equipment remains a bargaining chip in global trade disputes, how is China to increase the localization rate of chips?
As a representative for equipment manufacturers, Cao acknowledge that China’s semiconductor equipment is far from the world’s advanced level, and that has become an important factor restricting China’s semiconductor industry.
That said, Chinese companies are becoming competitive. Cao said, “When our equipment is good enough, they will remove it from the list of restricted exports. For example, the Bureau of Industry and Security of the United States Department of Commerce went to AMEC, and then went to SMIC the next day, where they saw our equipment running smoothly in SMIC’s fab. They removed the equipment from the embargo list six months later.” Cao said, “The reason is that China has been able to produce enough equipment and good equipment, so it’s no longer meaningful to continue to limit security in the United States.”
Even though China has made great progress in production equipment after 10 years, the overall situation is still unsatisfactory. Several people have said before that the equipment can be bought without having to spend a lot of money on it. However, after the ZTE incident, the whole country has a unified understanding.
Cao believes that the key to localization of equipment is the collaboration of upstream and downstream of the industrial chain. Downstream, Chinese IC manufacturing enterprises have to be willing to use equipment made by domestic suppliers. “In fact, we also have this problem. We will often ask ourselves: will we be reluctant to use domestically-produced parts? When we ask manufacturers to use domestically-produced equipment, can we actively help domestic suppliers who provide parts and subsystems for us?” he said.
“Domestic companies will encounter this problem,” Cao continued. “I think my product is ready, but no customers want to help me, no customer can tell me the disadvantages of my products.” In the past two years, the government has done a lot of work to promote the integration between upstream and downstream, such as letting downstream companies lead the research on some equipment and parts. From the first day, you are tied to the downstream enterprises.”
Developing a competitive local EDA industry is a long-term goal. Foreign manufacturers started 60 years ago and have developed through hundreds of mergers and acquisitions. It is unrealistic to expect China can become competitive in EDA in three years. Domestic EDA manufacturers must aim at 10 years and 20 years to do it.
