Top chip design tool makers see China's auto industry going places and look to leave export restrictions in the dust


South China Morning Post
Mon, July 3, 2023 at 3:30 AM MDT·4 min read

Chip design software companies are pinning their hopes on China's growing auto industry and its increasing demand for integrated circuits, executives suggested at Semicon China last week, while the top global players grapple with tightened restrictions on exports to the world's second-largest economy.

Liu Weiping, founder and chairman of the country's top chip design tool provider Empyrean Technology, said at the chip conference in Shanghai on Friday that the company is doubling down on building Chinese electronic design automation (EDA) solutions for automotive electronics to capture some of the rapid growth in the intelligent vehicle market.

"There are more and more electronic components in automotives, especially new energy vehicles, that require a large number of components such as chips, displays, and lidar," Liu said. "All the design of these components need support from EDA software."

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Empyrean Technology, which was founded in 2009 and went public in Shenzhen in July 2022, is viewed as one of China's best hopes to achieve self sufficiency in the EDA industry. The industry is currently dominated by just four US firms: Cadence, Synopsys, Ansys and Siemens EDA - known as Mentor Graphics before being acquired by Siemens in 2017 - which account for about 90 per cent of the market.

EDA is a category of software tools used for designing advanced integrated circuits, or chips containing billions of transistors, that serve as the "brains" powering everything from modern electric appliances, smartphones and personal computers to sophisticated medical equipment, cars and aircraft.

Danny Perng, senior vice-president of the Pacific Rim at Siemens EDA, also noted the auto industry's growing importance for chip design.

"The ecosystem of automotive electronics has been changing," said Perng in another keynote speech at the conference on Friday. "Tier1 [auto] companies such as BYD have ambitions to fully integrate chip design and manufacturing and build their own factories."

Perng praised Chinese electric vehicle makers for their "leading position" in the global market, which he said has created an excellent opportunity for the development of automotive electronics and semiconductors.

Perng said Siemens EDA has developed a set of "comprehensive solutions" for carmakers from auto chips to system intelligence that can help companies use human resources more efficiently, improve product quality, control costs, and shorten the time to market for new products.

The auto market has been a particular focus for chip makers in China because cars typically use mature-node chips that are not subject to US export rules. The market is also growing fast.

The automotive industry was the fastest growing among end-use industries for semiconductors last year, accounting for 14.1 per cent of global semiconductor sales, according to World Semiconductor Trade Statistics, a trade organisation. The Asia-Pacific region is expected to be the fastest-growing market for auto chips, according to the report.

Washington's escalating restrictions have contributed to a slump in China's chip industry, as have supply chain disruptions that were also exacerbated by geopolitical tensions. The global semiconductor industry is expected to see revenue fall 11.2 per cent year on year in 2023 to US$532 billion, according to a forecast from Gartner in April.

In the past several years, China has been ramping up its auto chips output, which is expected to reach US$17.2 billion this year, according to a report by AskCI Consulting. That would be a 55 per cent jump over 2018, growth that is being propelled by the increasing popularity of intelligent vehicles in the world's largest car market.

Empyrean's Liu said the company has developed a set of tools dedicated to the design of auto chips, which have higher standards compared with other integrated circuits.

Chips used in cars require a long life cycle - at least 30 years - and to be able to work in harsh environments including high temperatures, he said.

Beijing-based Empyrean is aiming to catch up with the four EDA leaders eventually, Liu added.

"We hope to learn from the 'big brothers', and stand with them side-by-side at the forefront of the [global EDA industry]," he said, earning loud applause from the conference audience.

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