Waves with China’s chip industry
China’s chip industry has suffered multiple setbacks as the country wages a war on corruption and the United States tightens sanctions.
SCMP The United States will ban the export of electronic design automation (EDA) software, known as GAA, to China, sources said. GAA is particularly important for creating advanced chips with superior performance. This technology requires specialized EDA software and engineers to design integrated circuits (ICs). Cadence Design Systems, Synopsys and Mentor Graphics are industry leaders, all based in the United States.
Analysts say this is a major setback for China’s continued efforts to source chips. An Nvidia expert said: “China lags behind in EDA software. Synopsis and Kaden have at least 30 years of experience in this field. China has little chance of catching up with the West in this area. It is a short time.”
Imported EDA software is one of the weak links in China’s semiconductor value chain. The country does not yet have a foundry capable of producing sub-5nm chips. Again, almost 3,000 IC design companies rely on US EDA software.
follow up Nike AsiaChina is still promoting its domestic semiconductor industry to reduce foreign dependency. However, the Beijing government is expressing disappointment that the chip sector has not performed as expected. The China Chip Industry Investment Fund (CCIF) is also developing into a hotspot. In late July, former CICF chairman Ding Wenwu was under investigation for allegedly diverting funds from the fund for personal expenses. A few weeks ago, Lu Jun, the director of the CCF-affiliated Sino IC Foundation, was arrested. Chip Giant Tsinghua Unigroup CEO Zhao Weiguo and former co-chairman Diao Shijing attended.
Chinese media have reported that investigations into chip companies are expanding. In the long term, the move may help keep the country’s semiconductor industry healthy, but in the short term it will significantly disrupt manufacturing activity.
The Chinese government has made semiconductors its top priority in its attempt to localize 70% of the chip industry market. Meanwhile, the United States is enacting new laws to curb China’s ambitions. At the end of July, the speaker of the US House of Representatives, Nancy Pelosi, signed the Science and Chips Act, which provides the semiconductor industry with 52 billion US dollars. The regulation says that subsidized companies are banned for 10 years from entering into “big deals” related to increasing chip production in China or any other country. The US President is expected to sign the bill into law on August 9th.
Kung Nha (Consequences SCMP, Nikkei Asia)