[News] Korean HBM Giants Cutting Chinese EDA Risks Higher Costs, Supply Chain Disruptions

As indicated by Korean Economic Daily, South Korean memory giant SK hynix, amid potential U.S. restrictions, is conducting an urgent review of Chinese EDA software, a move Samsung may likely follow suit.

However, industry experts cited by ijiwei warn that as U.S. EDA costs twice as much as Chinese alternatives, dropping Chinese EDA would increase Samsung and SK hynix’s reliance on U.S. suppliers, raising design costs.

South Korea: Home to HBM Giants, But Lacks Local EDA Support

The global EDA market is dominated by tech giants based in the U.S. and Europe. According to TrendForce, in 2024, Synopsys, Cadence, and Siemens EDA account for 32%, 29%, and 13% of the market respectively, for a total 74% market share.

Nevertheless, as per ijiwei, Chinese EDA firms have boosted R&D and sales to Samsung and SK hynix. For instance, Samsung has been using Chinese EDA since 2022, the report suggests.

EDA tools are known as the “mother of chips”. By simulating circuit designs before manufacturing, they could prevent costly design failures.

As AI and HBM become more intertwined, EDA’s role in memory grows even more vital. Yet, according to the Korea Economic Daily, there are only a few EDA firms in South Korea, like Baum and Alsemy, while China has around 300, with its top 10 advancing despite U.S. sanctions. Notably, the report brings up concerns that South Korea’s EDA tools still lag in AI-HBM integration.

China: A Key Hub for Memory Production

China is not only an alternative of EDA providers for South Korea. According to ijiwei, Samsung produces about 40% of its NAND chips in Xi’an, while SK hynix makes 40% of its DRAM in Wuxi and 20% of its NAND in Dalian, the report indicates.

Meanwhile, SK hynix also runs a packaging plant in Chongqing, and Samsung has a backend facility in Suzhou.

But indeed, China’s revenue share for South Korea’s memory giants is shrinking under U.S. pressure. In Q3 2024, according to its website, Samsung’s China revenue fell to 13% from 17% the previous quarter, while SK Hynix saw a drop from 30% to 24%, according to newdaily.

EDA: The Next U.S. Trade War Battleground?

Notably, the ijiwei report suggests that the U.S. has been tightening semiconductor restrictions on China, with EDA as a key target.

As per The Register, as early as in August, 2022, the U.S. banned EDA exports to China for sub-3nm chip design. In late 2024, the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) added new controls on 24 semiconductor tools and three software types, including EDA.

With a potential Trump ban on Chinese software, SK hynix’s EDA review looks like self-preservation, says ijiwei. But Korea’s weak EDA sector poses risks, and cutting China could disrupt the broader HBM supply chain, the report suggests.

Read more

• [News] China’s Semiconductor Equipment Industry Booming, Self-Sufficiency to Reach 50% by 2025?
• [News] SK hynix Reportedly Weighs Suspension of Chinese EDA Software Amid Expected U.S. Restrictions

(Photo credit: SK hynix)