How does EDA software break through the technical list of ＂stuck neck＂ in the United States？

After a lapse of one year, on May 15th, the US government once again used state power to block Huawei. Compared with the impact of last year’s "516 entity list", this attack is more accurate and thorough.

To put it simply, if any semiconductor company in the world wants to produce chips for Huawei, it needs to obtain permission from the United States first.

Why can the US government be so lenient? Because every semiconductor company in the world is using the software and technology of American companies more or less. This is the so-called "long arm jurisdiction".

Are semiconductor enterprises in China bound by this? Theoretically, this is the case, because some underlying technologies in China’s semiconductor industry chain can only adopt American technologies.

The United States’ comprehensive restriction and upgrading of Huawei’s chip industry covers the upstream software of chip design, the upstream equipment of chip manufacturing and the 7nm chip manufacturing mainly produced by TSMC. The US Department of Commerce has carried out a fixed-point precision strike on all links of Huawei’s chip industry chain.

The first thing is the upstream EDA software of chip design. Although Huawei can design chips, the high-end software EDA tools for IC design are still basically monopolized by three American companies: Cadence, Synopsys and Mentor. In the China market, these three EDA software companies occupy 95% market share.

As far as Huawei is concerned, since May 16 last year, the cooperation between the three major EDA manufacturers in the United States and Huawei has been terminated. This means that Huawei has not obtained new tools and new upgrade services since then, but it can continue to use EDA tools that Huawei has purchased and authorized. In other words, at present, Huawei Hisilicon can also use the old version of EDA for IC design.

However, in the long run, the localization of EDA software is imperative. Some analysts believe that the technical restrictions in the United States are bringing opportunities to the development of domestic EDA software in China.

Having said that, we must also be soberly aware of the technical gap between China and the United States in EDA software and the difficulty of domestic substitution. But at the same time, we should give up the illusion of "compromise and surrender" and seek the possibility of technological breakthrough.

Why is EDA software important?

If chip manufacturing is compared to building a building, IC design is the design drawing of the building, and EDA software is the design tool of this drawing, but the complexity of EDA software is n orders of magnitude higher than that of architectural design software.

EDA, the abbreviation of Electronics Design Automation, is a computer-aided design software system developed on the basis of electronic CAD technology, which integrates the latest achievements of applied electronic technology, computer technology, information processing and intelligent technology to automatically design electronic products.

Using EDA tools, electronic designers can design electronic systems from concepts, algorithms, protocols, etc., and can automatically process the whole process of electronic products from circuit design, performance analysis to designing IC layout or PCB layout on the computer. EDA technology can be widely used in many fields such as electronics, communication, aerospace, machinery and so on.

With the development of integrated circuit technology, EDA software is more and more synonymous with "chip design software tools" by the industry.

That is to say, EDA software is an important tool for chip design. However, due to the complex technology, fine division of labor and multi-technology synthesis of chip design, EDA software does not refer to only one or several softwares, but involves nearly a hundred different technologies and covers a variety of "point tools" software tool clusters.

EDA software can greatly improve the efficiency of chip design, and also has applications in chip manufacturing, packaging and testing. EDA, semiconductor materials and equipment together constitute the three foundations of integrated circuits.

Today, there are at least hundreds of millions to billions of transistors on a chip, and continuous simulation and verification are needed in the design process, which are inseparable from EDA software. Without EDA tools, no matter how high the level of chip designers is, there is no place for them.

From the basic role of EDA in chip design and manufacturing, its importance is self-evident; From the complexity of EDA software, its technical realization is very difficult.

Specifically, the front-end design of the chip includes chip specification formulation and detailed design, HDL coding, simulation verification, logic synthesis, static timing analysis (SAT) and formal verification. The back-end design includes DFT, FloorPlan, clock tree synthesis (CTS), Place & Route, parasitic parameter extraction, physical verification of layout and so on … …

Judging from the tools used in these design processes, it is almost monopolized by three American companies, Cadence, Synopsys and Mentor, which may disappoint many people who call for the localization of EDA software as soon as possible.

So, what challenges does the domestic substitution of EDA in China face?

What are the difficulties faced by EDA localization substitution?

We must first understand the characteristics of EDA industry. EDA is an extremely important key link in the integrated circuit industry chain, but it is also a highly centralized industrial link with relatively small output value.

In 2018, compared with the chip industry of nearly 500 billion US dollars, the market size of the whole EDA is only 9.715 billion US dollars. Among them, 70% of the market share is occupied by EDA giants Synopsys, Cadence and Mentor Graphics under Siemens. The global EDA industry has formed an oligopoly pattern of the three giants. In the China market, the three giants account for more than 95% of the EDA market share, with a higher concentration.

This has not only greatly squeezed the development space of China’s EDA industry, but also seriously affected the pace of domestic research and development of EDA software in China. In the 1990s, when the United States lifted the ban on EDA in China, the advanced EDA software from the United States quickly came to China, attacking the city all the way, which disrupted the pace of independent research and development of EDA in China, and "market for technology" became the path dependence for the next decade.

Compared with American high-end and mature EDA industrial chain, what are the difficulties in the development of EDA industry in China?

The first is the technical threshold. EDA tool is a "multi-tool" software cluster. At present, Chinese enterprises have achieved breakthroughs in some tools, but at present, more technology needs to be accumulated in the complete and available full-process tool chain, which cannot be completed in a short time.

Secondly, the technology integration is high. EDA is the result of long-term cooperation among chip design companies, fabs and EDA software vendors, which requires a lot of talent investment, mathematical optimization and experience accumulation, and cannot be achieved overnight. At present, many EDA enterprises not only provide EDA software, but also provide IP design, which can not only reduce costs, but also improve IP quality by developing some customized EDA functions, and become the main popular mode at present. Our country’s integrated design ability in advanced process is obviously behind the foreign 2-3 generations.

Once again, it is the talent threshold. In terms of EDA software R&D talents, there are not many universities in China that set up EDA majors, and the Internet and financial industries attract a large number of software development talents, which leads to a serious shortage of EDA software R&D talents.

Finally, China also needs to strengthen the intellectual property protection of EDA technology.

At present, EDA has become the key bottleneck for China’s semiconductor industry to achieve autonomous control. In the field of EDA software, China has owned enterprises such as Huada Jiutian, Guangliwei, Xinhe Technology, Lanhaiwei, Jiutongwei, Bodawei, Jilun Electronics, Kejingda, Chuanglian Zhiruan, etc. It is necessary to achieve a comprehensive breakthrough from "point" to "surface" in overcoming the above problems.

How to break the situation of EDA software localization replacement?

Let’s look at the current situation first. Before the 516 entity list incident last year, Huawei obtained the permanent authorization of EDA tools at that time. Because these EDA software can lead the actual chip manufacturing process for two or three years, the EDA ban will not have much impact on Huawei’s chip design in the short term.

However, if Huawei can’t get the updated and upgraded EDA tools because of the continuous technology export ban, it will greatly restrict Huawei’s iterative development in higher-end chip technology.

Not long ago, Huawei tried to design chips jointly with stmicroelectronics (STM.N). One of its purposes was to obtain EDA design technology to find technology records beyond the US technology ban. However, with the intensification of this round of sanctions, this cooperation may also be terminated.

At present, Huawei can only transfer 14nm chip manufacturing orders to domestic SMIC. In the manufacturing of 5nm and 7nm chips, SMIC still lags behind TSMC’s technology and process. One of the big reasons is that domestic manufacturers who provide chip design software for SMIC cannot achieve a breakthrough in the design of high-end chips.

In the long run, it is imperative to replace EDA software in China. The new round of technical restrictions in the United States has strengthened the determination and speed of China’s semiconductor industry’s autonomy. And a series of factors are also quietly promoting the development and break of EDA software industry in China.

First of all, the leading EDA enterprises in China are receiving a number of grants and strategic investments from the state and investment institutions.

On the evening of May 15th, SMIC announced that the second phase of the State Integrated Circuit Fund and the second phase of the Shanghai Integrated Circuit Fund had injected US$ 1.5 billion and US$ 750 million into SMIC South respectively. This will greatly expand the production capacity of 14 nm wafers.

Similarly, the country is also increasing the resource inclination of EDA industry and promoting the independent development of EDA software. Among them, Guowei Shenzhen’s special sub-project "Development and Application of EDA System in Chip Design Whole Process" ("the project") has been approved by the national major science and technology special project, and will receive a total of about 400 million yuan from the project. As the largest EDA company in China, Huada Jiutian has also received several rounds of investment of several hundred million yuan from various investment institutions in China in recent years.

In terms of policy support, in the face of the situation that domestic EDA software is not used, domestic EDA software is given a certain purchasing inclination. For example, the "Several Measures on Accelerating the Development of Integrated Circuit Industry" issued by Shenzhen recently introduced the first domestic policy to explicitly support EDA R&D, including funding incentives for EDA R&D and subsidies for purchasing domestic EDA software.

Secondly, at the market level, the new development of domestic IC industry also brings some opportunities for the development of domestic EDA software.

At present, new technologies such as 12nm and 7nm are widely used in domestic chips, which urgently requires domestic EDA software to develop products comparable to international manufacturers. Only in the design based on the most advanced technology, it is possible to find the defects of the process and potential product opportunities. Of course, this poses a certain challenge to domestic IC design enterprises, but in the case that the United States can "get stuck" at any time, we must pay some trial and error costs to promote the progress of domestic EDA software.

The rise of new applications such as AI chips and IoT chips has brought new challenges to the existing EDA industry and chip design process, and also brought many new technical research directions to small and medium-sized EDA companies, which has become a new opportunity for them to break through the barriers of EDA giants.

Thirdly, AI technology, as a new variable, is bringing a breakthrough to domestic IC design.

Recently, Google is using AI algorithm to learn the layout of chips, so that products beyond manual design can be designed in a shorter time. Similarly, AI technology is being widely used in EDA companies. For example, Empyrean Mcfly, which was launched by Huada Nine Days ago, uses AI algorithm to accelerate IP verification, and uses AI to learn previous IP cases to verify the new IP, and the verification accuracy reaches about 99%.

In addition, if we want to look at the "broken core" incident in the United States from a longer-term perspective, we must realize that perfect property rights protection of technological innovation and mature talent training mechanism are the fundamental ways for China to achieve core technology in its own hands.

Finally, we should realize calmly that the domestic substitution of EDA software and other related core technologies in chip manufacturing is definitely not a natural thing. Think about the prosperity and decline of Japanese semiconductors, which is our lesson.

In the short term, the prohibition of existing foreign EDA software will not have a fatal impact on Huawei, but Huawei is facing a more dangerous situation because of the upgrade of the entire semiconductor technology in the United States. Actively playing games and seeking "spare tires" have become two preparations to be carried out at the same time.

In the long run, the country and the industry can no longer have the illusion of "compromise" and "seeking to let go" of the United States. All sectors of the industry must show patience and determination to invest in the development and research of basic science and core technologies.

On this more difficult road, China’s chip industry and related science and technology industries should be prepared for long-term suffering. This is especially true for EDA software industry.