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[News] China’s EDA Giant Empyrean Technology Shifts Control to State-Owned Company after U.S. Blacklist
A week after Empyrean Technology has been added to the blacklist in the latest wave of U.S. chip export controls, the Chinese developer of chip design system has ceded control to its largest state-owned shareholder, China Electronics Corporation (CEC). According to a report from South China Morning Post, the move highlights how geopolitical pressures are driving closer collaboration between China’s state-owned enterprises and private firms in the semiconductor sector.
Notably, Beijing-based Empyrean Technology is considered to be China’s primary alternative to U.S. giants like Cadence, Synopsys, and Siemens EDA in the electronic design automation (EDA) market, as per the report.
Empyrean Technology, founded in 2009, holds a modest 5% share of China’s EDA market now, boosted by China’s push to localize its semiconductor supply chain, according to South China Morning Post.
According to the company’s financial report, its revenue surpassed RMB 1 billion (USD 137.6 million) for the first time in 2023, marking a 26.6% year-on-year increase. In the first nine months of 2024, its revenue rose by 16.3% year-on-year to reach RMB 744 million (USD 102.8 million).
In a corporate filing on Monday witnessed by South China Morning Post, Empyrean Technology announced that its board of directors had authorized CEC to assume full control of the company.
The report notes that four directors of Empyrean Technology have resigned from the board. CEC, which indirectly holds a 34% equity stake in the company, will now occupy six of the 11 board seats. A shareholder meeting is set for later this month to formally approve the changes, the report adds.
Previously a strategic investor, CEC will now fully integrate Empyrean Technology’s financial statements into its own and oversee the company as a direct subsidiary, as noted by the report.
It is worth noting that the restructuring, which does not include any equity stake transactions, comes just a week after the US Department of Commerce placed Empyrean Technology and its subsidiaries on the Entity List. Back then, the Chinese EDA company stated that the impact is “manageable,” the South China Morning Post report suggests.
In a similar development, in mid-November, Jiangsu Changjiang Electronics Tech (JCET), a leading company in China for advanced packaging technology, including 2.5D and 3D configurations, announced a significant restructuring of its board of directors following the acquisition of a 22.5% stake by the state-owned China Resources Group, as the state conglomerate becomes its largest shareholder.
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(Photo credit: Empyrean Technology)
