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China’s state assets watchdog calls for more achievements in chip design tools

The head of China’s state assets watchdog visited the country’s top chip design tool developer Empyrean Technology and called for more local achievements in the sector, as Beijing pushes ahead with its semiconductor self-sufficiency drive amid US sanctions.

Zhang Yuzhuo, head of the State-owned Assets Supervision and Administration Commission of the State Council, the top agency supervising the central government’s state-owned assets, visited the company on Thursday, the agency said on its official website.

Zhang was appointed head of the agency two months ago, after his predecessor Hao Peng was reassigned as party secretary of Liaoning province last November. Previously, Zhang held multiple roles at state-owned companies and in local governments, including chairman of oil and gas giant Sinopec and party secretary of the Binhai New District of Tianjin, a port city in northern China.

Zhang praised Empyrean Technology as a market leader in China’s electronic design automation (EDA) industry, and urged the company to come up with more “iconic and pioneering achievements” and strive to be the world’s leading provider of EDA tools.

Zhang also said the regulator would further implement “precise policies” to increase support for talent and funding related to the industry, and support state-owned companies in “overcoming difficulties” in the development of China’s integrated circuit supply chain.

The Beijing-based company, which was founded in 2009 and went public in Shenzhen last July, is considered one of China’s best hopes in cutting reliance on imported chip design tools. It is the only company in China that can provide a full suite of EDA tools to “meet the needs of most customers for analogue circuit design”, according to a 2022 research note by Zheshang Securities.

The company held a 6 per cent share of China’s EDA market in 2020, according to CCID consulting. Domestically-developed EDA tools accounted for just 12 per cent of the total market that year, with the remainder held by foreign EDA giants like Synopsys, Cadence and Siemens EDA, according to data from the China Semiconductor Industry Association.

Zheshang Securities forecast that the local share of EDA tools will grow to 22 per cent by 2025, because it will be easier for the sector to achieve self-sufficiency compared with other parts of the semiconductor supply chain.

Empyrean’s customers include Semiconductor Manufacturing International Corp and Hua Hong Semiconductor, China’s top two chip foundries.44

Zhang’s visit comes as Beijing and provincial governments are doubling down on their chip self-reliance drive, with massive financial support and preferential policies being offered as the country digs in for a protracted tech war with the US.

Liu He, the former vice-premier, told industry representatives last month that China must maintain a “whole nation” approach to its semiconductor industry by leveraging both state and market power.

Starting last year, a number of local governments in China, including Shanghai, Guangzhou, Hangzhou and Suzhou, rolled out generous subsidies and other supporting measures for the semiconductor self-sufficiency push.

In October last year, the US Commerce Department updated its export controls, restricting China’s access to advanced chips and certain semiconductor manufacturing and design tools. It also restricted “US persons” – including American citizens and green card holders – from working at China-located facilities if their work included advanced chips. South China Morning Post

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