Lee Jong-ho, Korea's Minister of Science and ICT, reportedly arranged a meeting with semiconductor Electronic Design Automation (EDA) professionals to gain insights into the local EDA industry.
Lee, a semiconductor specialist, sees South Korean EDA's lack of competitiveness as a big threat to the country's semiconductor industry. As a result, he is actively seeking a settlement.
EDA is a crucial software tool used for the development and validation of semiconductor circuit designs. Chipmakers employ EDA tools for pre-manufacturing simulation and verification, to eliminate significant losses caused by faults in chip design. These techniques aim to identify circuit designs and defects.
EDA: Essential for semiconductor design sovereignty
EDA is seen as the peak of the semiconductor food chain.
However, South Korea is an EDA desert, with only a few companies active in related fields. According to local industry insiders, founding and supporting EDA companies is crucial to maintaining "semiconductor design sovereignty."
Commentary from local South Korean media channels indicates that customized EDA software tools are playing an important role in the race for global semiconductor dominance in system semiconductor design.
In 2022, China experienced an EDA crisis due to the US' continued prohibition of chipmaking technology exports, which targeted the country's semiconductor industry. As a result, Chinese IC design companies were unable to use American EDA tools. In May 2023, Chinese smartphone company Oppo announced the termination of its IC design team, Zeku, as many projects were ultimately stalled due to a lack of proper EDA tools.
Since then, China has made every effort to support its own EDA technology, finance a portion of the R&D investment of EDA companies, and establish specialized talent cultivation institutions.
Should Korea boost EDA competitiveness?
Data from the annual International Conference on Computer-Aided Design (ICCAD) was once cited in Chinese media reports, which indicated that China has 87 of the 140 EDA participants in the world.
According to South Korean media reports, the top 10 EDA enterprises in China have already achieved a substantial degree of technological independence, as evidenced by the statistics. Conversely, Baum and Alsemy are among the only handful of South Korean EDA companies currently operational, as indicated by the reports.
In the global EDA market, the top three firms with the highest market share are Synopsys (32%), Cadence (30%), and Siemens EDA (13%). These three companies collectively account for approximately 75% of the global market share, resulting in an oligopolistic situation.
Even though South Korea is home to Samsung Electronics and SK Hynix, the country's few EDA companies have almost no market share in the worldwide market.
South Korea has several highly skilled professionals in EDA. However, over 90% prefer to work for foreign companies, with most joining the three largest EDA companies in the US.
Baum has been dedicated to research and development from its inception and is motivated to establish a presence in South Korea. However, it has faced various challenges in recruiting EDA professionals, for example.
South Korea evaluates local EDA subsidies
The Minister of Science and ICT of South Korea has initiated discussions regarding countermeasures. According to local media reports, the South Korean government intends to provide tax breaks and subsidies to local EDA companies and IC design houses for EDA-related expenses.
The importance of EDA technology is becoming increasingly clear in light of the intensifying US-China conflicts and geopolitical concerns. Many countries view EDA as a strategic weapon in semiconductor warfare. The requirements for using EDA have become more strict, and the cost has increased.
In addition, as AI chips continue to advance and gain popularity, the importance of EDA is set to increase significantly. Nonetheless, established EDA companies are using the interoperability of their products to create barriers for new entrants wanting to enter the market, which has piqued the attention of relevant South Korean authorities.
To effectively transition into the era of generative AI, there is also a perspective within the industry that South Korea should possess its own EDA capabilities. According to experts at Sungkyunkwan University, the South Korean government should prioritize EDA for economic security.
