China’s largest state-owned military conglomerates and research institutes continue to buy U.S.-made design tools essential to the development of computer chips, Kharon found.
The purchases come amid growing U.S. regulatory concern related to China’s acquisition of U.S. technology for military end uses (MEU). When implementing its MEU rules, the U.S. said exporters should conduct their own due diligence, as its listings should not be treated as exhaustive.
In one case last year, U.S.-origin chip design software was sold to China’s Strategic Support Force, a branch of the Chinese army that engages in space and cyber warfare, official documents show.
Foreign supply chain dependence: Cultivating an independent semiconductor supply chain is a national priority for China, but the country’s domestic industry remains highly dependent on crucial foreign technology. Among China’s needs are U.S.-made electronic design automation (EDA) tools, which are a collection of software and hardware tools used to design chips.
As chips become more complex, increasingly powerful EDA tools are necessary to produce the newest cutting-edge circuits used in the aerospace and defense industries. EDA tools are used in every step of a chip’s design process, beginning with designing a proposed circuit, simulating and predicting its behavior, to verifying that the chip is correctly designed and will work as expected. By helping automate the design process of complex chips that contain billions of transistors, EDA tools have enabled a broadening set of companies to design their own chips that meet specific requirements.
The EDA market: The global EDA market is largely dominated by four U.S.-based companies: Cadence Design Systems, Inc, Synopsys, Inc., Ansys, Inc, and Siemens EDA (also known as Mentor Graphics), which together control roughly 90 percent of the market, according to a report by French think tank Institut Montaigne. Chinese EDA makers are eight to 10 years behind their American counterparts, according to estimates cited by Ars Technica, a tech industry-focused news site.