The U.S. has lifted export restrictions on Electronic Design Automation (EDA) software to Chinese companies. This move means more stability in global tech trade. However, experts warn this could intensify global competition in the semiconductor industry. This is particularly true for India.
The US had placed these restrictions on China. They cited concerns that the Chinese military will use these products. With this reversal, major EDA companies can fully resume operations with Chinese entities. Cadence Design Systems (San Jose), Siemens EDA (Wilsonville), and Synopsys (Sunnyvale) are included in these companies.
Higher Competition for India
“China’s industry is strengthening its capabilities. This could create increased competitive dynamics for India’s EDA sector. This development may influence the broader electronics industry. Ruchir Dixit told ET that it may significantly affect the semiconductor sector. He is the chairperson of the India Electronics & Semiconductor Association (IESA) board of directors.
He further added that “until a few months ago, nobody thought of software as a supply chain problem. Now, with this action, the supply chain includes software as well. It includes anything that enables creation and employment in India.”
Will firms reevaluate investing in India as part of the “China Plus One” strategy? Dixit said that companies evaluating India for EDA or related functions might now reassess. They might reconsider the timing of their investments.
Biswajeet Mahapatra, principal analyst at Forrester, also highlighted the increasing competition. He said that the decision would benefit China to accelerate its R&D and manufacturing efforts in the chip industry. China will pose competition to India in design and packing particularly.
Also read: Tata to Establish India’s First Semiconductor Plant
Need for Indian Innovation
Kunal Chaudhary, partner and co-leader of EY India’s Inbound Investment Group, said, “India must move faster on chip design. With the US easing EDA export restrictions for China, the global playing field is shifting.”
He emphasized the need for India’s own chip design software to lead the next revolution in semiconductor technology.
Kathir Thandavarayan, partner at Deloitte India, also said that the US’s decision will help China push ahead. Advanced chip design is key to driving cutting-edge technologies like artificial intelligence (AI) and high-performance computing.
He added that India is focused on mature nodes. These nodes meet 75–80% of global demand. India aims to develop an end-to-end value chain in the medium term. The country already accounts for 20% of the world’s semiconductor design engineers.
Are Restrictions on Indian Semiconductor Industry Possible?
Jaswinder Ahuja, former managing director of Cadence India, questioned if restrictions on India are in the USA’s future plans. He also highlighted that India has potential for startups in areas like AI, chiplets and 3D-IC packaging, that remains untapped.
Notably, none of the beneficiaries under the government’s Design-Linked Incentive (DLI) scheme are EDA companies. These startups will require government support to face the tense global competition.
However, Shankar Krishnamoorthy, chief product development officer at Synopsys, said the company does not anticipate similar restrictions on India. This is because of New Delhi’s growing semiconductor ambitions. It also considers its collaboration with the US.
For all latest updates Follow theviralmail on X, Facebook, and Instagram
