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India.com

a day ago

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China semiconductor industry: In a major decision that could severely impact India's ambitions to domestically produce semiconductor chips, the Donald Trump administration has lifted curbs on the Electronic Design Automation (EDA) software to China, allowing American EDA giants such as Cadence Design Systems (San Jose), Siemens EDA (Wilsonville), and Synopsys (Sunnyvale), to resume operations with Chinese firms. How US decision could hamper India's chip design ambitions?
Industry experts have warned this development is likely to impact India's EDA sector, and the country need to ramp up its domestic chip design capabilities to offset the overwhelming competition from China.
'The strengthening capabilities of China's industry could create increased competitive dynamics, not only for India's EDA sector but also across the wider electronics and semiconductor industry,' The Economic Times quoted Ruchir Dixit, chairperson of the India Electronics & Semiconductor Association (IESA) board of directors, as saying.
Dixit added that while nobody thought of software as a supply chain problem, until a few months ago, now its clear that this is indeed the case. 'It includes anything that enables creation and employment in India'. On whether the US move could result in companies reconsidering their China Plus One' strategy, he said the firms evaluating India for EDA or related functions might now reassess the timing of their investments.
Notably, many industry insiders have brushed aside these concerns, with Shankar Krishnamoorthy, chief product development officer at Synopsys, stating that his company doesn't anticipate that the US would place similar curbs as China on India, citing the close ties between Washington and New Delhi. Why China could become a major player in semiconductor industry?
However, experts have warned that China could zoom past India and other countries in semiconductor sector as the renewed access to key design software would allow Beijing to accelerate its R&D and manufacturing efforts, which would intensify the global race for market share and foreign investment, particularly in design and packaging.
'India must move faster on chip design. With the US easing EDA export restrictions for China, the global playing field is shifting,' ET quoted Kunal Chaudhary, partner and co-leader of EY India's Inbound Investment Group as saying. Chaudhary said India must develop its own chip design software which has become a strategic necessity in the current scenario.
He also stressed on the need for targeted investment in R&D, intellectual property, and advanced skill development.
Another expert, Kathir Thandavarayan, partner at Deloitte India, noted that the US' decision to remove EDA software restrictions will allow Chinese firms to boost their advanced chip design efforts, a key requirement for cutting-edge technologies like artificial intelligence (AI) and high-performance computing.
Kathir noted that India accounts for 20 percent of the world's semiconductor design engineers, playing a vital role in advanced node design. Currently, the country is focused on meet around 75–80 percent of global demand for mature nodes, and aims to develop an end-to-end value chain in the coming future. Where does India stand?
Meanwhile, Dixit noted that no EDA company is part of the Indian government's Design-Linked Incentive (DLI) scheme. 'They are all design companies, people who will make or design some silicon or some printed circuit board (PCB) that will go into a system using EDA,' he said, adding that EDA majors like Siemens, Cadence and Synopsys make it difficult for smaller companies and startups to do proper R&D.
'They don't have enough people to solve a problem if it is a very complicated problem,' he said, citing this as the reason why there aren't many EDA firms in India which offer a wider range of services.