Core Insights - The rapid development of emerging technologies such as 5G, artificial intelligence, and autonomous driving has led to a significant increase in chip demand, with EDA (Electronic Design Automation) being a crucial technology in the semiconductor industry that determines chip performance and innovation capability [1] - The global chip design market is dominated by the "three giants" of EDA: Cadence, Synopsys, and Siemens, but domestic companies in Suzhou are making strides in the EDA sector [1] - Suzhou-based companies like Peifeng Tunan, Fuhui Technology, and Xiliancheng Software are innovating in EDA tools and services, aiming to enhance the competitiveness of domestic semiconductor firms [1][2][3] Company Developments - Xiliancheng focuses on the design phase of chip development, utilizing self-developed EDA tools to analyze chip layouts and significantly improve efficiency, achieving a tenfold increase in analysis speed compared to manual methods [2][3] - The company has developed a technology chain that includes EDA tools and IP design services, helping clients navigate intellectual property challenges and reduce development costs [3][4] - Fuhui Technology has launched an AI-based EDA tool, AnaSage, which automates the design process for analog chips, reducing design cycles from months to weeks and improving accuracy [5][6][7] - Peifeng Tunan is creating a "virtual wafer factory" using digital twin technology, providing comprehensive EDA software and process development services to optimize semiconductor manufacturing [8][9][10] Industry Trends - The EDA sector is witnessing a shift towards domestic innovation, with companies like Peifeng Tunan and Fuhui Technology developing tools that not only compete with international products but also offer unique advantages tailored to local needs [9][10] - The integration of AI and traditional EDA tools is becoming a key differentiator, enabling faster and more efficient chip design processes [6][7] - The collaboration between local semiconductor firms and EDA companies is enhancing the development of tailored solutions, fostering a closed-loop ecosystem from design to production [10]

Core Viewpoint - The Chinese regulatory authority has suspended the antitrust review of Synopsys' acquisition of Ansys, adding uncertainty to the deal amid escalating US-China technology tensions [1][2]. Group 1: Acquisition Details - Synopsys announced a final acquisition agreement with Ansys on January 16, 2024, with a total transaction value of approximately $35 billion, where Ansys shareholders are expected to hold about 16.5% of the new company post-merger [1]. - The merger is viewed as a "strong alliance," combining Synopsys' significant position in the EDA (Electronic Design Automation) sector with Ansys' expertise in industrial simulation software, which spans various industries including automotive, aerospace, and electronics [1]. Group 2: Regulatory Environment - The suspension of the antitrust review by Chinese regulators is seen as a cautious decision influenced by the US's recent export control measures targeting China's semiconductor industry, which has led Synopsys to halt sales and technical support activities in China [2]. - Analysts suggest that the Chinese regulatory stance is a response to US actions perceived as attempts to restrict China's chip design capabilities, indicating a need to maintain market competition and assert technological sovereignty [2]. Group 3: Global Antitrust Review Progress - Prior to the suspension, the UK's Competition and Markets Authority (CMA) and the European Commission expressed concerns that the merger could weaken competition in specific markets related to digital chip RTL power analysis software and optical software [3]. - To address these concerns, Synopsys and Ansys proposed several remedial measures, including divesting Ansys' RTL power analysis business and selling Synopsys' optical solutions group, which helped alleviate regulatory worries in Europe [3]. - Despite the ongoing uncertainties, 21 brokerages, including Berenberg, continue to maintain a "buy" rating for Synopsys, although the market remains cautious about the future of the transaction [3].

Investment Rating - The report rates the electronic industry as "stronger than the market" [1] Core Insights - The EDA (Electronic Design Automation) sector is experiencing accelerated domestic substitution due to U.S. restrictions on EDA exports to China, which is seen as a bottleneck for the rapid development of China's technology industry [5][8] - The global EDA market is projected to grow steadily, with a compound annual growth rate (CAGR) of 8.87% from 2019 to 2024, reaching a market size of approximately $15.71 billion in 2024, reflecting a year-on-year increase of 8.1% [3][10] - Domestic EDA companies are rapidly increasing their market share, with a growth rate of 13.3% in China, indicating significant potential for domestic substitution [3][10] Summary by Sections EDA Market Overview - The global EDA market is expected to reach $15.71 billion in 2024, with a CAGR of 8.87% from 2019 to 2024 [3][10] - The top three EDA companies (Synopsys, Cadence, Siemens) hold a combined market share of 74% [10][23] - The Chinese EDA market is projected to grow to 135.9 billion yuan in 2024, with a market growth rate of 13.3% [10][26] Domestic EDA Development - Domestic EDA companies like Huada Jiutian, Gai Lun Electronics, and Guangli Microelectronics are focusing on full-process EDA tool development, indicating a shift towards self-sufficiency [5][35] - The domestic EDA market is characterized by a significant growth rate of 20.4% for local companies, compared to 8.4% for international counterparts [11][32] Industry Dynamics - The EDA sector is crucial for the semiconductor industry, with increasing demand for precision and functionality in chip design tools [11][32] - The report highlights the importance of advanced packaging technology and efficient design tools, which dominate the EDA market structure [10][28] Recent Developments - Broadcom reported a record revenue of $15 billion in Q2 2025, driven by strong demand for AI-related products, indicating a robust market for semiconductor solutions [41] - AMD's acquisition of Untether AI's team is expected to enhance its capabilities in AI chip technology, reflecting ongoing innovation in the semiconductor space [43][44]