The US reversal, after the restrictions imposed by President Donald Trump, allows leading EDA software companies such as San Jose-headquartered Cadence Design Systems, Wilsonville-headquartered Siemens EDA and Sunnyvale-headquartered Synopsys to resume full engagement with Chinese entities.
“The strengthening capabilities of China’s industry could create increased competitive dynamics, not only for India’s EDA sector but also across the wider electronics and semiconductor industry,” Ruchir Dixit, chairperson of the India Electronics & Semiconductor Association (IESA) board of directors, told ET.
“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,” he said.
Regarding companies rethinking their ‘China Plus One’ strategy with the lifting of software curbs, Dixit said that companies considering investing in India for EDA development or other functions might choose to thoughtfully evaluate their timing.
However, Shankar Krishnamoorthy, chief product development officer, Synopsys, said the company does not foresee the software export restrictions that were previously placed on China being placed on India, especially given India’s ambition to build its semiconductor ecosystem and the existing US-India collaboration in the sector.
But Biswajeet Mahapatra, principal analyst at Forrester, said this signals increased competition.
A more enabled Chinese chip industry, with restored access to critical design software, can accelerate its own research and development (R&D) and manufacturing, potentially intensifying the race for global market share and foreign investment, especially in design and packaging where India is also making significant strides, he said.
Kunal Chaudhary, partner and co-leader, Inbound Investment Group, EY India, emphasised the need for India to act swiftly. “India must move faster on chip design. With the US easing EDA export restrictions for China, the global playing field is shifting,” he said.
Chaudhary said “building our own chip design software is a strategic necessity, not just for resilience but to lead in the next era of semiconductor innovation”, calling for focused investment in R&D, intellectual property (IP) and deep skilling.
Kathir Thandavarayan, partner, Deloitte India, said that with the rescinding of EDA software restrictions, Chinese design entities will continue their efforts in advanced chip design that are crucial for cutting edge technology applications such as artificial intelligence (AI) and high-performance computing.
This is an area of importance for India, too. However, India currently focuses on mature nodes that account for 75-80% of the market demand, with an objective of creating an end-to-end value chain ecosystem in the medium term. The country accounts for 20% of semiconductor design engineers globally and thus plays a very critical role in chip design in advanced nodes, Thandavarayan said.
Jaswinder Ahuja, former managing director of Cadence India, said that while the immediate impact on Indian companies might be limited, it “raises questions about potential future restrictions on India”.
He also highlighted the opportunities for EDA startups, “particularly with the industry’s growing focus on AI, chiplets and 3D-IC packaging”.
Ahuja said these startups, “unencumbered by legacy constraints, can reimagine design approaches and drive innovation”.
Dixit pointed out that none of the beneficiaries of the government’s Design-Linked Incentive (DLI) scheme, for example, are EDA companies. “They are all design companies, people who will make or design some silicon or some printed circuit board (PCB) that will go into a system using EDA,” he said.
“The inherent challenges are that the three (Siemens, Cadence, Synopsys) are so big and have armies of people trying to solve problems that it becomes difficult for a smaller company to find a problem which a major EDA is not looking at. They don’t have enough people to solve a problem if it is a very complicated problem,” he said.
This is why India doesn’t see many EDA companies with a wide range of products initially, he said.
Cadence India declined to comment.
The US decision, while fostering greater stability in global tech trade, clearly signals a more competitive environment for India’s semiconductor aspirations. The consensus among experts is that India must leverage this stability to further its own domestic capabilities, invest heavily in R&D and skill development, and solidify its position in the global semiconductor landscape.
