On December 28, 2021, Shanghai Gelun Electronics Co., Ltd. was successfully listed on the Science and Technology Innovation Board of the Shanghai Stock Exchange. Its stock abbreviation is “Gelun Electronics” and the stock code is “688206”.
In recent years, as the synergy between the upstream and downstream of the integrated circuit industry has been significantly enhanced, the country and the market have paid more and more attention to the domestic EDA industry, and domestic EDA has ushered in important development opportunities. At present, many EDA companies including BGI, Guangliwei, Sierxin, etc. are in the IPO process, and Gailun Electronics took the lead in listing on the Science and Technology Innovation Board, which also means that the domestic capital market officially ushered in the first EDA Listed company with main business.
The rise of domestic EDA manufacturers
EDA (Electronic Design Automation) refers to a design method that uses computer software to complete large-scale integrated circuit design, simulation, analysis and verification processes.
As an important support of the integrated circuit industry, the EDA industry has been developed and technologically precipitated for decades. EDA tools have almost covered the entire process of integrated circuit design and manufacturing, with very comprehensive functions and a wide range of technical fields. Thanks to the update and iteration of technology and the growth of demand in many downstream fields, the EDA market is in a continuous upward trend. According to SEMI data, the global EDA market will be 11.467 billion U.S. dollars in 2020, a year-on-year increase of 11.63%.
2012-2020 global EDA market size (100 million U.S. dollars)
Data source: SEMI; Picture source: Gelun electronic Prospectus
Compared with the global integrated circuit market of more than 360 billion U.S. dollars, the EDA industry accounts for a small proportion, but as a lever to leverage the entire integrated circuit industry, the global market scale of about 10 billion U.S. dollars supports and influences data. Hundreds of billions of dollars in the integrated circuit industry.
As we all know, EDA tools have a relatively obvious scale effect. From the perspective of the global EDA industry competition pattern, Synopsys, Kenton Electronics, and Siemens EDA occupy the world’s major EDA market, and the industry is highly concentrated. These companies have consolidated their core product advantages through high R&D investment, and gradually formed full-process solutions through continuous expansion, mergers, and acquisitions, established a relatively complete industry ecosystem, and formed high industry barriers and user stickiness .
According to CCID Consulting’s data, the top five EDA companies in 2020 accounted for approximately 85% of the global EDA market share.
Market share of the world’s top five EDA companies
(The data from the inner circle to the outer circle are 2018-2020 respectively)
Data source: CCID Consulting; Picture source: Gelun electronic prospectus
Surrounded by giants, the domestic EDA market is highly concentrated, and most of the market share is occupied by international EDA giants. Based on the technical advantages and ecological barriers of the EDA industry giants, EDA companies have two different development characteristics and breakthrough paths around the world: one is to prioritize breakthroughs in key links, core EDA tools, and gain international leadership in many of its core products After the customer has verified and formed an international leading position, it will launch key process solutions that are competitive in the international market for specific design applications; the other is to prioritize breakthroughs in some design applications to form a full process solution, and then gradually improve the entire process solution The international market competitiveness of core EDA tools in each key link.
Among them, Gelun Electronics is a typical representative of the core tools that give priority to breakthroughs in key links among domestic EDA companies. Gelun Electronics was established in 2010. Since its inception, the company’s founding team has realized that the evolution of global integrated circuit technology and the rapid development of China’s integrated circuits require the support of integrated circuit design methodology and EDA process innovation. Guided by the concept of “Yield Oriented Design (DFY) to Improve the Competitiveness of Integrated Circuit Design and Manufacturing”, we will conduct forward-looking technology research and development and product layout.
In recent years, with the evolution of advanced process nodes to 7nm and below, the complexity and risk of design and manufacturing have greatly increased. Whether to ensure high performance and yield of chips has become the focus of integrated circuit companies, DFY’s forward-looking Fully verified, and after years of accumulation, it has further evolved into a new “design-process collaborative optimization (DTCO)” methodology.
According to the prospectus, Gelun Electronics focuses on the DTCO methodology and focuses on the EDA process innovation. It selects its key links to make breakthroughs one by one, and makes key breakthroughs in the two key links of integrated circuit manufacturing and design, device modeling and circuit simulation verification. Independently developed device modeling and verification EDA tools and circuit simulation and verification EDA tools with international market competitiveness, which can effectively support the design and manufacturing of large-scale complex integrated circuits under advanced process nodes such as 7nm/5nm/3nm, and help crystal In the process development stage, Yuanchang evaluates the reliability and yield characteristics of the optimized process platform, establishes accurate device models, PDK and standard cell libraries, and helps integrated circuit design companies to effectively predict the performance and yield of chips through fast and accurate circuit simulation. Optimize circuit design.
Main Products and Service Layout of Gelun Electronics
(Picture source: Gelun electronic prospectus)
In terms of manufacturing EDA tools, Gelun Electronics’ device modeling and verification EDA tools have achieved a high market position and have been adopted and verified by most of the world’s leading fabs. Major customers include TSMC, Samsung Electronics, UMC, and Grid Core, SMIC, etc. occupy an important position in their related standard manufacturing processes. The device model generated using this EDA tool is provided to its global integrated circuit designer customers through the world’s leading fab. Its comprehensiveness, accuracy and quality have been verified and widely recognized by the industry for a long time.
At the same time, circuit simulation and verification EDA tools, as the core key tools in the field of integrated circuit design, have also been adopted on a large scale by leading international semiconductor manufacturers, including Samsung Electronics, SK Hynix, Micron Technology, Changxin Storage, etc., empowering domestic and foreign Leading memory manufacturers continue to develop advanced memory chips.
It can be seen that Gelun Electronics plays a role of link and bridge in the two links of integrated circuit design and manufacturing, and promotes the deep linkage of integrated circuit design and manufacturing. For more than ten years, Gelun Electronics has always adhered to forward-looking strategic positioning and layout, guided by market competitiveness, and continued to carry out technological innovation and product research and development upgrades. It has completed the successful transformation from technology to product. In device modeling and Circuit simulation has taken the lead in technology breakthroughs in the two fields of circuit simulation. The products have entered many international leading integrated circuit design and manufacturing companies, and have grown into a world-renowned EDA company. Its innovative EDA methodology, professional products and services have gained value Highly recognized by the industry.
At present, the main products and services of Gelun Electronics include manufacturing EDA tools, design EDA tools, semiconductor device characteristic testing instruments and semiconductor engineering services.
Semiconductor device characteristic testing is to measure, collect and analyze the current, voltage, capacitance, resistance, low-frequency noise, reliability and other characteristics of integrated circuit devices in different working conditions and working environments to assess whether they meet the design indicators. The semiconductor device characterization test instrument of General Lun Electronics can support a variety of types of semiconductor devices. It has the characteristics of high accuracy, fast measurement speed and multi-task parallel processing. It can meet the multi-dimensional and High precision requirements. At present, it has been widely adopted by the world’s leading integrated circuit manufacturing and design manufacturers, well-known universities and professional research institutions.
At the same time, the data collected by the semiconductor device characteristic test instrument is also the data source required for device modeling and verification of EDA tools, and the two have a strong synergistic effect. Through the linkage of EDA tools and semiconductor device characteristic testing instruments, we will create data-driven EDA solutions, closely integrate and form a business chain, and continuously expand product coverage.
Semiconductor engineering services mainly use its own EDA tools and test equipment, based on its own accumulated experience and capabilities in the field of modeling and library building for many years, to provide customers with device modeling and semiconductor device characteristic testing services. This service cooperates with other types of products to form a more complete and higher value-added solution, and it can also promote the more efficient use of other products by customers, thereby further increasing customer stickiness. It is a leading international company An important window for IC companies to interact.
In addition, Gelun Electronics can also provide knowledge system training, modeling process construction, test environment setting and other services for the initial fabs, assisting customers in completing a full set of initial device models and PDK development, helping customers quickly pass the initial construction stage, and then It may bring new order opportunities for the company’s products. The semiconductor engineering services of General Lun Electronics have strong market recognition. Customers include TSMC, Samsung Electronics, UMC, SMIC and other four of the world’s top five fabs, and cover many well-known integrated circuit companies at home and abroad. .
Many years of mass production and application of General Lun electronic products in global top customers have brought the company a continuous and stable cash flow, a solid market position and a solid customer base; on the other hand, due to the leading technology of the top customers , Product performance and quality requirements are strict, and its verification and feedback on the company’s products can promote the company’s technological iteration to maintain technological advancement, and provide a window for the landing of new technologies and new products.
On the whole, under the premise of having high-value landing scenarios and application requirements, Gelun Electronics has used a relatively short time, small personnel scale and investment to create a new design methodology and process, and gradually form a technological competition. With powerful EDA tools and engineering services, and obtaining product verification opportunities in the international mainstream market, it has achieved a breakthrough in the monopoly of the entire process of the international EDA giants in multiple links and dimensions.
The breakthrough “key” of Gelun Electronics
There are two main reasons why General Lun Electronics is able to occupy a place in the highly monopolistic and technically barrier market of EDA in a relatively short period of time.
On the one hand, it is the persistence of innovation and continuous R&D investment in core technology. Since its establishment, Gelun Electronics has been focusing on the research and development of EDA tools, focusing on R&D investment for a long time, and focusing on the introduction and training of talents.
Gelun Electronics attaches great importance to personnel training, and carries out the introduction of high-quality talents through multiple channels. In September 2020, co-sponsored the “Shandong University-Galun Electronic Integrated Circuit Graduate EDA Innovation Class” with Shandong University to provide support for internship training, employment training, innovation and entrepreneurship of EDA talents, and realize systematic production, education and research. In-depth cooperation; in addition, through providing more competitive salary levels and incentive mechanisms, equity incentives are provided to outstanding employees.
In order to consolidate its position in the industry and continue to promote the evolution of advanced process nodes, Gelun Electronics will continue to increase its R&D investment in the field of EDA. This time it will land on the capital market to raise funds of 1.210 billion yuan for public offering, which will be used for investment modeling and simulation. System upgrade construction project, design process collaborative optimization and storage EDA process solution construction project, R&D center construction project, strategic investment and merger integration project, and supplementary working capital.
Raised funds to invest in specific projects and the company’s main business,
The relationship between core technologies
(Picture source: Gelun electronic prospectus)
Among them, the investment modeling and simulation system upgrade construction project is to upgrade and iterate on the basis of the company’s existing technology and products, in order to continue to maintain the company’s leading advantage in the field of device modeling and circuit simulation, and further improve international competitiveness.
It can be seen that Gelun Electronics will focus on the strategic layout of technology and products mainly around the collaborative optimization of process and design, and continue to develop, evolve, and expand core technologies. It has established key tools and DTCO methodology and processes that are competitive in the international market. On the basis of the results of innovation and exploration, we will further innovate more key tools and processes.
On the other hand, while developing its own research and development, Galen Electronics is also drawing on the development experience of industry giants to implement mergers and acquisitions of high-quality assets in the industry.
The EDA industry is a highly technology-intensive industry, which has the characteristics of difficult research and development, high demand for compound talents, high market entry barriers and long verification cycles. At the same time, there are many chain links in integrated circuit design and manufacturing and different technical requirements. Larger. Therefore, it is often difficult for a single company to develop key EDA tools with market competitiveness in a short period of time. Companies in the industry generally adopt a combination of endogenous growth and extensional mergers and acquisitions to achieve the coverage of the entire EDA process and the long-term development and business of the company. growing up.
Take the industry-leading companies Synopsys, Kent Electronics, and Siemens EDA as examples. Since their establishment, they have gone through dozens or even nearly a hundred mergers and acquisitions and continued to integrate to exert synergistic effects, and they have gradually achieved their current market positions.
Given the large size gap between Chinese companies and major international companies, using capital operations for commercial mergers and acquisitions is a very efficient and commonly used means of expansion. In addition to independent research and development, Gelun Electronics will also expand its external development through domestic and foreign mergers and acquisitions, accelerate its own technological upgrading, continue to enrich core technologies, and expand the company’s coverage.
At the end of December 2019, Gelun Electronics completed the acquisition and integration of Barda Micro. In June 2021, it completed the acquisition of 100% equity of Entasys, a South Korean EDA company. The completion of related acquisitions gave full play to the industry synergy and further improved the product. And the scope of services, expand the market share, and also provide a model for the follow-up mergers and acquisitions of G-Lun Electronics.
In the future, Gelun Electronics may integrate high-quality industry targets through strategic investment, mergers and acquisitions, integrate domestic and foreign professional technology and human resources, accelerate industrial layout, extend the industrial chain, promote effective coordination of industrial resources, and create a complete industry ecosystem .
Write at the end
As an important support of the integrated circuit industry, the EDA industry is at the forefront of the integrated circuit industry. With the technological iteration of the integrated circuit industry, the emphasis on EDA tools is increasing day by day, and the dependence also increases. At the same time, the continuous emergence of many emerging application scenarios and the increase in system complexity have also created new requirements for EDA tools.
Looking back at the development of China’s EDA industry, the domestic EDA industry started early. The development of my country’s own EDA system (namely the Panda system) began in 1986. However, due to the relatively lagging development and support of the industry’s ecological environment, technology R&D optimization and product verification iterations are relatively slow At present, there is a big gap between the overall technical level of the industry and the international EDA giants, and the self-sufficiency rate is low.
According to data from the China Semiconductor Industry Association, China’s EDA market will be approximately 9.31 billion yuan in 2020, a year-on-year increase of 27.7%, accounting for 9.4% of the global market share.
2015-2025 China’s EDA industry market size
Data source: China Semiconductor Industry Association;
Picture source: Gelun electronic prospectus
As the world’s largest and fastest-growing integrated circuit market, China has huge room for development and market potential for domestic EDA. In recent years, as the country and the market attach more importance to the domestic EDA industry, the upstream and downstream synergy has been significantly enhanced. Domestic EDA companies have gradually emerged under the positive influence of industrial policies, industrial environment, investment support, industry demand, and talent return. .
At the same time, affected by international trade frictions, the industry’s awareness of the urgency and necessity of the development of my country’s EDA industry has increased significantly. Domestic integrated circuit companies have begun to accept or increase purchases of domestic EDA tools that are competitive in the international market due to factors such as safety and sustainability. This also provides more opportunities for the sound development of domestic EDA companies.
Under the current development background and trend of the industry, the rapid development of Gelun Electronics and its successful landing on the Science and Technology Innovation Board have injected a boost of domestic EDA. Driven by the broad market demand, Gelun Electronics will continue to expand and improve the R&D team in the future, optimize the allocation of resources, carry out the strategic layout of technology and products around the collaborative optimization of process and design, and is committed to based on the core EDA technology currently owned. Provide professional and efficient EDA process and tool support to improve the overall technical level and market value of the integrated circuit industry.
Of course, the rise of domestic EDA is also inseparable from the joint efforts of all parties in the industry chain. It requires EDA companies to work hard on research and development, but also requires domestic downstream customers to provide domestic companies with certain trial and error opportunities and living space to help local industries continue to improve. upgrade.
Facing the rare development opportunities in the current EDA industry, “EDA’s No. 1 Share”, Gelun Electronics took the lead in launching an assault.