Chip Design of India at Risk After US Lifts China EDA Ban

Chip Design of India: In the wake of the United States lifting key export restrictions on Electronic Design Automation (EDA) software for Chinese firms, industry leaders are sounding a clear alarm: India must urgently accelerate its domestic chip design capabilities to maintain relevance in the evolving global semiconductor landscape.

This pivotal policy reversal by Washington—removing curbs imposed under former President Donald Trump—has enabled American EDA giants like Cadence Design Systems (San Jose), Siemens EDA (Wilsonville), and Synopsys (Sunnyvale) to resume full-scale operations with Chinese clients. The development, according to analysts, marks a significant shift in the balance of technological power.

Chip Design of India: China’s Surge and India’s Strategic Crossroads

“Until recently, software wasn’t considered part of the supply chain. Now, it is. And that realisation should be a wake-up call,” said Ruchir Dixit, Chairperson of the India Electronics & Semiconductor Association (IESA). He noted that the decision has reshaped how nations must think about innovation and job creation across the Indian chip design capabilities spectrum.

Dixit warned that the reentry of China into the full EDA ecosystem could dampen foreign enthusiasm for India under the widely promoted “China Plus One” strategy. Companies eyeing India for semiconductor design and innovation might now reconsider or delay their plans.

India’s Position in the Semiconductor Race

Still, there is cautious optimism. Shankar Krishnamoorthy, Chief Product Development Officer at Synopsys, clarified that India is not under threat of similar sanctions, highlighting its growing collaboration with the US and rising semiconductor ambitions.

However, Biswajeet Mahapatra, Principal Analyst at Forrester, argued that the lifting of restrictions may allow China’s chip design sector to accelerate significantly. “With renewed access to EDA software, China can fast-track R&D and manufacturing—especially in areas like AI and advanced packaging—posing a serious competitive challenge to India.”

Chip Design of India: Urgent Call for Investment and Innovation

India’s technological community is now calling for action. Kunal Chaudhary, Partner at EY India’s Inbound Investment Group, emphasised the urgency: “The global playing field is shifting. India must act decisively to build its own EDA tools and strengthen India’s chip design capabilities through strategic investments in R&D, IP creation, and next-gen skills.”

His sentiment was echoed by Kathir Thandavarayan, Partner at Deloitte India, who underlined that China’s push into advanced nodes—crucial for cutting-edge tech like AI and high-performance computing—could widen the capability gap if India doesn’t respond in time. Currently, India focuses primarily on mature nodes, which fulfil around 75–80% of global demand.

India’s strength lies in its talent: the country already contributes 20% of the world’s semiconductor design engineers, many of whom are involved in leading-edge projects. Yet, experts warn that talent alone isn’t enough without an innovation ecosystem supported by robust policies and capital.

The EDA Gap and Missed Opportunities

Jaswinder Ahuja, former MD of Cadence India, pointed out that while immediate effects on India might be muted, the strategic implications are serious. He believes startups could play a crucial role in innovating areas like chiplets, AI accelerators, and 3D-IC packaging. “Unburdened by legacy systems, Indian startups can rethink the fundamentals of design,” he said.

However, Ruchir Dixit noted a glaring omission in India’s current policy framework—the Design-Linked Incentive (DLI) scheme doesn’t include EDA firms. “We’re incentivising companies building silicon and PCBs, but not those who create the foundational software tools that enable it all,” he observed.

This, he argues, leaves India trailing the likes of Siemens, Synopsys, and Cadence, who dominate the global EDA space. “Smaller Indian firms often lack the resources to tackle complex design problems,” he added, underscoring the need for a stronger EDA startup ecosystem.

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