News

Difficulties for China’s chip industry

Trường Lăng

August 9, 2022

News

Difficulties for China’s chip industry

Trường Lăng

August 9, 2022

According to sources from SCMP, the US is ready to block the export to China of electronic design automation (EDA) software called GAA. GAA is especially important in developing advanced chip generation with better performance. This technology requires specialized EDA software and engineers need this software to design integrated circuits (ICs). Cadence Design Systems, Synopsys and Mentor Graphics are industry leaders, all of which are based in the US.

According to analysts, this will be the next major blow to China’s ambitions to be self-sufficient in chip sources. An Nvidia specialist said: “China is lagging behind in EDA software. Synopsys and Cadence have at least 30 years of experience in this area. China has little chance of being able to catch up with the West in the short term.”

Imported EDA software is one of the weak links in China’s semiconductor value chain. In China, no foundries have been able to produce chips below 5nm. About 3,000 IC design companies in the country are also heavily dependent on US EDA software.

According to Nikkei Asia, China is still promoting the domestic semiconductor industry to reduce dependence on foreign countries. However, the Beijing government is showing disappointment that the chip sector has not developed as expected. The China Integrated Circuit Industry Investment Fund (CICF) is also becoming a “hot spot”. At the end of July, former CICF chairman Ding Wenwu was investigated on suspicion of transferring the fund’s cash for personal spending. A few weeks earlier, Lu Jun, the former director of Sino IC fund affiliated with CICF, was arrested. Zhao Weiguo, head of chip giant Tsinghua Unigroup, and Diao Shijing, a former co-chairman, are also involved.

Chinese media reported that the investigation of chip companies is still expanding. In the long run, this may help the country’s semiconductor industry become healthier, but in the short term it will cause a significant disturbance in production.

Semiconductor is considered a top priority by the Chinese government with the goal of localizing 70% of the market share in the chip industry. Meanwhile, the US is making new laws to constrain China’s ambitions. In late July, Nancy Pelosi, Speaker of the United States House of Representatives, signed the Chips and Science Act, which contains $52 billion in support for the semiconductor industry. It also specifies that companies accepting subsidies will be restricted from making any “significant transaction” to expand their chipmaking capacity in China or any other foreign country of concern for 10 years. The Act is expected to be signed into law by the President of the United States on August 9.

Source : VnExpress

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