Breaking Through China’s Chip Barriers: The Rise of Domestic EDA Solutions

The chip industry has always been at the heart of global technology competition, and China’s progress in this field draws intense attention. As international dynamics grow increasingly complex, the global semiconductor supply chain faces mounting tension. With November 1, 2025, fast approaching, the focus has shifted toward critical software technologies—especially Electronic Design Automation (EDA).

EDA, often hailed as the “mother of chips,” plays a vital role in chip design. For years, it has been dominated by overseas giants, making it one of the weakest links in China’s efforts toward chip independence. Now, more than ever, all eyes are on the progress of domestic EDA innovation.

Global Giants Still Reign Supreme

As the saying goes, “to do a good job, one must first sharpen one’s tools.” EDA, short for Electronic Design Automation, is indispensable in chip design. According to Tang Zhimin, Dean of the School of Computing and Microelectronics at Shenzhen Institute of Technology, “Deep integration between design and manufacturing is key to producing world-class chips, and EDA software is the bridge connecting the two.”

In earlier decades, when circuit boards contained only a handful of transistors, engineers could draw layouts by hand. But with today’s chips containing tens of billions of transistors, EDA has become as essential to chipmaking as CAD is to architecture or Photoshop to design.

However, this critical market has long been monopolized by three American powerhouses—Synopsys, Cadence, and Siemens EDA. TrendForce data shows that in 2024, their global market shares were 31%, 30%, and 13%, respectively—together holding a massive 74% of the market. In China alone, these three giants command over 70%.

This dominance traces back to the 1980s, when the “Big Three” began forming. China’s first EDA software, Panda System, didn’t arrive until 1993, filling a major domestic gap but remaining years behind international standards. Despite its lower price—just one-tenth of similar products—Panda System was eventually sidelined when the foreign giants entered the Chinese market with free licenses and strategic collaborations.

As one software engineer noted, “Software thrives on usage. Once a mature ecosystem is built, newcomers find it nearly impossible to catch up.” Thus, EDA has long been China’s most vulnerable bottleneck in chip development.

Rising Demand, Rising Pressure

In recent years, China’s tech giants have entered the chip race—Xiaomi with its Surge O1 SoC, Li Auto with the M100 autonomous driving chip, Baidu with its Kunlun AI chip, and Alibaba with its li-NPU inference chip.

With this momentum comes surging demand for EDA tools. Data from the China Semiconductor Industry Association shows that both the design and manufacturing phases of the chip supply chain—together accounting for over 75%—rely heavily on EDA.

If global EDA giants were to cut off access, Chinese chipmakers could face a “choke point” crisis. As YuanChuan Tech Review warns, “Without EDA licensing, chip designers can’t obtain the latest foundry PDKs, making new process development and tape-out impossible.”

Domestic EDA: Fighting Back

China’s homegrown EDA developers haven’t given up. Instead, they are carving out new paths for survival and growth.

One such success story is Empyrean Technology (Huada Jiutian), the successor to Panda System. The company first found its niche in the display industry, becoming a global leader in flat-panel design automation. Today, one in every three smartphone screens worldwide uses chips designed with Empyrean’s tools. Having built this foundation, Empyrean has since expanded into core chip design software, achieving a 35% penetration rate among domestic fabless firms—including major clients like HiSilicon and ZTE Microelectronics.

Another rising star is Xpeedic, which focuses on high-end device modeling and circuit simulation—critical for 5G base station chips and advanced designs. Its NanoSpice simulator has passed Samsung’s 3nm GAA certification, putting it alongside Synopsys and Cadence as one of only three global players at that level.

In addition, Xpeedic has acquired IP firms to create an “EDA + IP” model that shortens chip development cycles, offering a one-stop solution that enhances competitiveness.

A Surge of New Players

As global uncertainty grows, EDA localization has shifted from an option to a necessity. According to TechNode, China now has over 60 companies developing EDA software—more than the rest of the world combined.

Among them, QiYunFang has emerged as a standout newcomer. The company recently unveiled two EDA software products for schematic and PCB design, boasting a 30% performance improvement and a 40% reduction in hardware development cycles. More than 20,000 engineers have already adopted their tools.

Unlike the serial processing models of foreign EDA, QiYunFang pioneered parallel collaborative design, enabling up to 100 engineers to work simultaneously on schematics and 20 on PCBs—revolutionizing team efficiency.

As PhantomTech observed, “QiYunFang didn’t just achieve ‘domestic substitution’—it redefined the technical benchmark through architectural innovation, establishing a new global reference for design efficiency and compatibility.”

AI: The Great Equalizer

The rise of AI may be the catalyst for China’s leap forward in EDA. Large models can now predict chip performance under specific workloads, reducing redundant work and minimizing design errors. Machine learning algorithms can also optimize chip layouts more efficiently than traditional EDA tools.

Crucially, in the AI era, domestic and global companies are competing on a level playing field. Whoever masters AI-driven EDA first will shape the industry’s future.

For instance, Xpeedic is developing an AI modeling system based on the Transformer architecture, aiming to shorten modeling time from two weeks to just 24 hours.

The Road Ahead

The transformation of the EDA industry is inevitable. Self-sufficiency in this critical software field is no longer a long-term goal—it’s an urgent mission. With legacy leaders like Empyrean and Xpeedic joining forces with innovative newcomers like QiYunFang, China’s EDA ecosystem is rapidly evolving.

Sooner or later, “Made in China” chips will no longer be at the mercy of others.