According to the Financial Times, the US has ordered electronic design automation (EDA) vendors to stop supplying Chinese firms. This includes software needed to produce chips on the cutting edge of miniaturisation, like those on a 3-nanometre node.
Xiaomi is the first major casualty. In May, the smartphone giant unveiled its XRING O1 processor, a custom-designed chip produced by TSMC. The chip uses American EDA tools now covered by the new export directive. It was meant to mark Xiaomi’s entry into serious chip development, with plans to scale its use across future smartphones and tablets.
Lenovo and Bitmain are also affected. Both companies rely on US-origin EDA tools to design their chips, which are then manufactured by TSMC.
While the US has not revoked existing licences, future software updates and support will now be blocked. Without those, manufacturing in Taiwan using the latest tools becomes increasingly difficult. AI chips were already off limits for TSMC to make for Chinese clients. This move extends the choke point to design software, raising questions about how long these chip projects can continue.
Some Chinese firms, like Huawei, have long been preparing for this. The company has invested in home-grown EDA tools and has backed domestic players like Empyrean Technology, which is now seeing surging demand. Empyrean’s software covers simulation and layout tools, and while it trails Synopsys and Cadence in sophistication, it is considered “usable” for chips made on nodes of 7nm and above.
Other companies are reportedly using pirated EDA software. One unnamed semiconductor analyst told the FT, “It is very easy to hack into the system to get the support you need.” He added that many Chinese firms have long used EDA tools without paying, which partly explains why US firms haven’t seen Chinese demand scale with capacity growth.
The Bureau of Industry and Security, part of the US Commerce Department, has now expanded its control over the chip supply chain, pushing China further towards building a parallel tech ecosystem. Whether it’s too late remains an open question.
