Per a report by the Vietnam News Agency, Vietnamese Prime Minister Phạm Minh Chính recently signed Government Decree No. 791/QĐ-TTg on the establishment of the National Steering Committee for Semiconductor Industry Development.

The main tasks and functions of the steering committee include assisting the Prime Minister and the government in researching, guiding, and coordinating the resolution of important and cross-departmental matters related to promoting the development of Vietnam’s semiconductor industry; researching, consulting, and advising on directions and solutions to promote the industry’s growth; and guiding the coordination among various departments, government agencies, relevant organizations, and entities to vigorously advance the development of Vietnam’s semiconductor industry.

Semiconductor industry is one of the strategically important global industries, and it undoubtedly represents a significant development opportunity for Vietnam.

It is reported that the semiconductor, as one of Vietnam’s nine national-level products, has been included in the country’s key development priorities for the next 30 to 50 years.

According to its National Semiconductor Industry Strategy, Vietnam aims to become a global center for semiconductor chip design, packaging, and testing by 2030.

To achieve this goal, the Vietnamese government has introduced a series of preferential policies and incentives to encourage foreign enterprises to invest in the country.

Moreover, the government has established the National Innovation Center (NIC) to create a high-tech ecosystem and beef up the training of professionals to meet the needs of developing semiconductor industry.

Currently, Vietnam has drawn in investment from foreign enterprises such as Intel, ASE Group, Samsung Electronics, Amkor, Qualcomm, ONSemi, Renesas, Texas Instruments, NXP, Marvell, Synopsys, Hana, and Anpei. In fact, with global capital investment, Vietnam’s semiconductor industry ecosystem is gradually taking shape in recent years.

Vietnam’s Minister of Planning and Investment Nguyễn Chí Dũng stated that Vietnam boasts some conditions and factors conducive to the development of semiconductor industry, involving a stable political system, a favorable geographical location, and attractive investment incentive policies.

The Vietnamese government has been committed to developing semiconductor industry and hopes to attract more and more large enterprises to invest in Vietnam.

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• [News] Nvidia CEO Visits Vietnam, Plans to Establish Chip R&D Base

(Photo credit: Intel)

X-Epic, a prominent Chinese electronic design automation (EDA) start-up, is said to be reducing its workforce by up to 50%, according to a report by South China Morning Post. As chip design is an indispensable part to semiconductor manufacturing, the incident raises concerns about China’s push for technological self-reliance.

X-Epic, founded in 2020 by Wang Libin, a former engineer at US EDA leader Cadence Design Systems, has been established with the goal of creating indigenous EDA tools to challenge the dominance of US rivals. The field is traditionally governed by US giants including Cadence, Synopsys, and Mentor Graphics (now owned by Siemens).

Based on the definition by Cadence, EDA encompasses software, hardware, and essential services used in the design of chips and semiconductor devices. Historically, hardware architects sketched chip designs by hand and used isolated tools. However, alongside the rapid growth of AI, EDA has become indispensable as chip designs get complicated. The tool provides a simulated environment where circuits and designs are conceived and analyzed before being realized in the physical world.

According to the report, as of March, 2023, X-Epic employed approximately 400 people across offices in Nanjing, Beijing, Shanghai, Chengdu, and Shenzhen. However, the company began laying off up to half its employees recently across various departments, including its key research and development division.

The report further analyzes that in In August 2022, Washington first restricted China’s access to the EDA technology by prohibiting the export of gate all-around (GAA) capable EDA software, which creates challenges for Chinese chipmakers in adopting advanced processes such as the 3nm node and in developing high-performance computing or AI chips.

Citing data from the China Semiconductor Industry Association, the report notes that the value of China’s EDA market is projected to reach 18.5 billion yuan (USD 2.55 billion) next year, up from 9.3 billion yuan in 2020. As the market seems to be booming, X-Epic’s reported layoff highlights the challenges China’s EDA companies are facing.

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• New US EDA Software Ban May Affect China’s Advanced IC Design, Says TrendForce

(Photo credit: X-Epic)

Following the US’s recent expansion of chip control measures targeting China on October 17th, the American chip maker, Advanced Micro Devices (AMD) is reportedly planning workforce reductions of approximately 10% to 15% at its Shanghai research center. Additionally, there are rumors of impending layoffs in the Chinese subsidiary of Synopsys, a leading Electronic Design Automation (EDA) giant from the US.

As reported by the tech media ICsmart, recent leaks on a Chinese social community have hinted at AMD’s workforce cuts in China, which are expected to affect around 10% to 15% of their employees, encompassing roughly 300 to 450 individuals. Notably, the Radeon Technologies Group (RTG) department is anticipated to be significantly affected.

Insiders within AMD revealed that on October 25th, all meeting rooms at the Shanghai research center were pre-booked by the Human Resources department, strongly suggesting that layoffs are on the horizon.

Established in 2006, AMD’s Shanghai research center stands as their largest facility outside of the United States, employing around 3,000 professionals. The center plays a crucial role in designing, developing, and testing products like Central Processing Units (CPUs), Graphics Processing Units (GPUs), and Accelerated Processing Units (APUs). It has been instrumental in introducing innovative products to AMD’s portfolio, such as the Ryzen series processors and Radeon series graphics cards. The RTG department at AMD is responsible for advancing Radeon series graphics card technologies.

AMD’s financial report for the second quarter of this year reveals a total revenue of $5.4 billion, a decline of 18% compared to the previous year. Significantly, the net profit was only $27 million, marking a substantial 94% drop from the same period last year.

China represents AMD’s most substantial overseas market, with sales reaching $5.27 billion in 2022, contributing to 22% of their total revenue.

Reports indicate that the US introduced new bans on Chinese chips on October 7th last year, particularly affecting high-performance chips used for AI computations. On October 17th, the US further tightened these restrictions, leading to the inclusion of more NVIDIA and AMD GPU products, directly impacting AMD’s research and development efforts in mainland China. Given this context, news of AMD layoffs in China doesn’t come as a surprise.

The report also suggests that, while this isn’t something China welcomes, from another perspective, these layoffs might channel more talent towards local GPU manufacturers. Many key figures in Chinese GPU startups have their roots in AMD.

Furthermore, there are rumors that Synopsys recently convened an all-hands meeting, indicating the possibility of impending layoffs.

As a global leader EDA, Synopsys established its presence in China back in 1995 and has since established offices in various cities. The company boasts a workforce of over 1,500 people and has a robust system for technical research and talent development.

The report mentions that the impact of the US restrictions on Synopsys mainly stems from its inability to supply to Chinese chip design companies already included on the US Entity List, such as Huawei’s Hisilicon. While it has negatively impacted its business, the growing trend of Chinese firms pursuing self-developed chip production mitigates the overall impact.

(Image: AMD)

TrendForce’s investigations show that, among the three categories in the upstream semiconductor supply chain, which consist of semiconductor manufacturing equipment, materials, and EDA, China made the most progress regarding self-sufficiency in semiconductor equipment, followed by materials, with EDA coming in last, in 2020. In other words, Chinese companies are relatively slow to develop EDA solutions.

The EDA market is relatively oligopolistic and involves two US companies. That means once the US implements more stringent controls over the export of EDA technologies and products to China, China’s development of semiconductor self-sufficiency will most likely suffer dire consequences as a result. Even if Chinese domestic companies are able to supply semiconductor equipment for mature process nodes as well as technologies for chip design, manufacturing, and packaging/testing, these things are essentially inoperable without EDA software and technical support. That is to say, the EDA industry remains the final piece of the puzzle for China’s quest for semiconductor self-sufficiency. Since China’s new IC policies (termed the Policies for Promoting the High-Quality Development of the Integrated Circuit Industry and the Software Industry in the New Era) place more emphasis on semiconductor equipment, materials, and software, compared to past policies, EDA (for which China’s self-sufficiency rate is lower than 10%) will likely become the top developmental priority within the software category in the new IC policies.

Chinese EDA suppliers are likely to provide domestic substitute solutions for mature process nodes

As the Chinese semiconductor design and manufacturing industries continue to expand, the Chinese EDA software market is expected to grow at a 15.1% CAGR across 2020-2024, which is faster than the global average of 10.3%. Although Synopsys, Cadence, and Siemens still account for an approximately 80% share in the Chinese EDA market, domestic companies in China have been accelerating their pace of development in recent years. For instance, companies that have more than 10 years of experience developing EDA software, including S2C, Empyrean, Primarius, Xpeedic, NineCube, and Cellixsoft, are gradually making waves in the industry, while many other emerging companies, such as X-EPIC, Arcas, LEDA, and AMEDAC have also been attracting more attention in the EDA market recently. Now that China-US trade tensions have yet to be resolved, and China continues to proceed with its new IC policies, Chinese EDA suppliers will likely experience rapid growth going forward, especially in their attempt to create domestic substitutes for 28nm and other mature process technologies.

（Image credit: Unsplash）