By hmimcu 
On the one hand, it is an EDA listed company with a valuation of tens of billions; On the other hand, some small and medium-sized enterprises are actually unable to bear the cost of legitimate EDA, so they rely more on subsidies from local governments. Some small and micro enterprises have weaker payment ability, and if asked if they have the use of legitimate EDA, they may not be able to obtain a clear answer.
For chip design companies, EDA is their drawing software, as it needs to interface with wafer foundries on the manufacturing side, with a vast amount of precision and carelessness. But just like many Chinese netizens who are accustomed to using cracked versions of Windows, pirated EDA is also a phenomenon that cannot be ignored.
For domestic EDA companies that have borne the hope of breaking through the industry, this is an obvious challenge:
They have raised billions of yuan, but after developing products and putting them into the market, they may face a limited market due to the use of pirated EDA.
The reason is very simple.
Enterprises with payment power directly buy the most convenient EDA tools, and their projects are so expensive that they cannot afford the setbacks of slight failures in production tools.
Enterprises lacking payment power buy EDA tools like a person driving a car, and pirated EDA is like a free German Mercedes Benz. Why not use it? Domestic EDA, like a domestically priced Roewe in the market, is difficult to obtain.
Under such market conditions, where is the breakthrough point for domestic EDA?
Past experience: A successful case that can be easily counted
So far, there are only a few cases in the domestic EDA market that can be called “onshore”, and only a few of the most typical ones are listed:
Firstly, Huada Jiutian is the king of EDA in simulating the entire process of chip and panel design. It originated from the pure national team lineage of Panda EDA, bravely expanding overseas markets, and finally landed after enduring for thirty years.
Then there is Galen Electronics, which provides manufacturing EDA directly to global storage giants and cooperates with a large number of technical services, making it unable to pirate, forming a competitive moat.
There is also Guowei Sierxin, relying on prototype verification hardware and software systems that cannot be pirated, forming a partial full process product line for the global market.
At this point, after a brief reflection, we can see that:
As a type of industrial software, EDA cannot be separated from the basic industrial environment. The process of wafer manufacturing is not advanced enough, and the specifications of chip design are not complex enough to support the further development of EDA industrial software attached to it.
The successful cases of domestic EDA have three common characteristics:
Local market endogenous growth or mergers and acquisitions, forming a specific competitive full process product; If software is too easy to be pirated, then do hardware; Enter the global market, expand user base, and increase revenue.
However, compared to the most advanced American EDA market, a very significant feature of the domestic market can be found:
There are very few successful EDA manufacturers who only specialize in a specific point tool. It should be noted that the dozens or hundreds of point tool manufacturers acquired by the global EDA giants in their development history are mostly from the United States.
So, a key question is why EDA companies that specialize in certain point tools cannot survive in China? Or, even when capital is very abundant, EDA point tool companies are still rare?
Reflection on the Market Level: Clearing the Supply of Piracy is Very Important
It’s very simple to say.
EDA Point Tool Company, in China, is not only unable to tell ambitious stories about domestic substitution, but also unable to raise funds from the capital market; They are even more unable to survive in the harsh market environment, with long and thin streams, and then valued based on the number of engineers and sold at high prices to the three giants (Xinsi, Kaideng, Mingdao).
Local chip design companies either use expensive and user-friendly genuine EDA or use pirated versions. That is to say, a potential EDA user is either 1 or 0, and the intermediate state of paying to use a less good and inferior domestic EDA is rarely present in the market.
This has resulted in a large user base for paid legitimate EDA in China, and the market is already very small, unable to ensure rapid product testing, validation, and iteration. If we create a small point tool locally, we cannot ensure revenue and profits, which is almost self defeating.
So, following this logical chain, there have been a large number of EDA manufacturers in the Chinese market who have been committed to making full process tools since their inception. Because only such a business plan, despite the high demands placed on the technical foundation and business development, can be financially justified.
However, when domestic start-up EDA companies want to launch products, they still cannot escape the “gravity” of the local market.
A binary opposition EDA market is not a structurally healthy market.
As long as users can obtain and use pirated EDA for free and without any cost, even if the government provides subsidies for domestic EDA usage, there will still be some users who “cheat” and deceive others.
If only a small number of users sincerely use domestic EDA, how can the EDA industry accomplish the arduous task of “substitution”? I’m afraid surviving healthily will become a problem.
Did you see that? After a while of deduction, a serious suggestion was finally made: Combating piracy.
In recent years, China’s emphasis on intellectual property has been increasing, and it can be said that it has been elevated to a considerable height. However, the importance attached to intellectual property rights in the chip industry has not yet matched the growth rate of investment amount.
At least, as early as the turn of 2000, American manufacturers had to pay a significant legal price for using infringing or pirated EDA software, while China still held a relatively lenient attitude towards this issue.
In an EDA market where piracy has not been cleared, only the strongest and strongest piracy can develop. The second largest domestic EDA is struggling to survive, and subsidy policies sometimes tend to malfunction.
When all pirated EDAs were cleared and all chip designers had to use genuine copies, the market size expanded and real, different levels of demand emerged.
So, some domestically produced EDAs with lower performance but higher cost-effectiveness, or EDA small factories that focus on specific niche tools, can also gain profits and develop financially healthy.
This situation is not only conducive to effectively promoting domestic substitution, but also helps to form different levels of participants in China’s EDA industry.
Rich Country’s Ladder: Is Intellectual Property Only Used to Protect Others?
Chinese people have a natural aversion to intellectual property protection. Because we have suffered many losses in this area, from VCDs, mobile phones to chips nowadays, intellectual property protection is a sharp tool that Western developed countries have “stuck in the neck”. Over time, intellectual property protection has become one of the many notorious “double standard” political means.
Historical facts indeed prove that intellectual property protection is a powerful “ladder” for rich countries to kick off developing countries.
In 2002, Zhang Xiazhun, a Korean economics professor at the University of Cambridge, published a book on the evolution of industrial policy, titled “The Rich Country Trap: Why Developed Countries Kick the Ladder”.
His research shows that in the early stages of development in developed countries such as the UK, Germany, and the US, they were often the most enthusiastic poachers for stealing intellectual property.
Jefferson, the father of the United States, once said, ‘Slaves can be privatized, but how can knowledge be privatized?’? This is a cover for the massive theft of British books by Americans and the sending of industrial spies to Europe to “learn” technical knowledge.
This is the reincarnation of Kong Yiji in the works of Master Lu Xun: can the matter of a scholar be considered theft?
However, if it were to do so, it would selectively ignore a fact: after entering the ranks of developed countries, the United States not only maintained such a stance of intellectual property protection externally, but also remained so for domestic use, and could even be said to be several times stricter. Why is this?
Simply put, since they are all from the same country, we can’t steal them ourselves, can we? So, who else within a country is willing to innovate?
And China may have reached the time window for serious intellectual property discipline domestically. Otherwise, some participants who use pirated EDA but want to create innovative chip products with completely opposite means and purposes, wouldn’t it be ironic?
Some people may be concerned that preventing people from using pirated EDA would result in some companies shutting down and what about GDP?
This question is difficult to answer.
But there are some signs that repetitive and outdated mid to low end chip production capacity, relying on subsidies, has taken up a large amount of resources, leading to some excellent enterprises facing the problem of shortage of production factors.
Genuine EDA is a key factor in improving productivity and affecting the overall situation. If piracy is still used, it is necessary to consider whether there is a need for a product line.
Finally, using a movie by Feng Xiaogang, I sincerely wish the Chinese chip industry:
Across the sea of cores, there are no thieves in the world.