[Software] Chinese Chip Design Software Devs Receive Massive Government Support

[GL HERO SHIMA]

Driven by government subsidies and support, China's domestic developers of electronic design automation tools (EDA, or software used for designing integrated circuits and circuit boards), are witnessing a surge in sales, and can therefore increase their R&D investments.

After the U.S. restricted sales of advanced EDA programs to Chinese entities last year, Chinese chip designers had to increase the adoption of domestic EDA tools. As a result, Empyrean Technology and Primarius Technologies have reported sales jumps of over 30% in the first three quarters of 2023, reports DigiTimes.

Empyrean Technology is more financially successful than its rival, primarily because of massive subsidies from the government. For the nine months that just ended, Empyrean Technology earned ¥171 million ($23.523 million), but the government subsidies totaled a whopping ¥129 million ($17.745 million). This subsidy was a crucial factor in the company's profitability. On the other hand, Primarius Technologies, despite receiving ¥9.38 million ($1.29 million) in grants, has not been able to curtail its financial losses, which have increased to ¥28 million ($3.851 million).

With ample government help, Chinese EDA tool developers can invest massive amounts of money in research and development, so Empyrean and Primarius allocated 70.56% and 67.47% of their sales to R&D, respectively, in 2023. These figures dwarf the relative R&D spending of Synopsys and Cadence, which have maintained their R&D spending at a more conservative 30-40% of their sales. 

https://www.tomshardware.com/tech-industry/semiconductors/chinese-chip-design-software-devs-receive-massive-government-support