Zheshang: The growth rate of the EDA market in China is significantly higher than the global average. The localization rate and global market share are expected to continue to increase.

Zheshang released a research report stating that the CAGR of the Chinese market from 2022 to 2024 is 10.55%, significantly higher than the global growth rate of 7.84%, with an expected breakthrough of over 50 billion yuan in 2030. The EDA industry is at a critical period of domestic substitution, with increased policy support and leading platform-type companies actively promoting point tool mergers and acquisitions, which are expected to accelerate the achievement of full-process coverage. In the long term, the domestication rate and global market share are expected to continue to increase, and it is recommended to pay attention to the long-term investment value of the core targets in the industry chain. Key points from Zheshang are as follows: - EDA Industry: Leveraging a small market to drive a large ecosystem, highlighting strategic value - Industrial foundation attributes: EDA is an essential tool for semiconductor design, with a global scale of approximately 15.7 billion US dollars by 2024, accounting for only 2.5% of the semiconductor industry (631 billion US dollars), but supporting a digital economy worth tens of trillions of dollars; under advanced process nodes, the value increases, with costs exceeding 10 million US dollars for 28nm and nearly 100 million US dollars for 7nm, EDA directly determines the success rate of chip fabrication, with cost weight continuously rising. - Chinese growth momentum: The Chinese EDA market is expected to increase from 19.3 billion yuan to 35.4 billion yuan from 2025 to 2027, with a CAGR of 35.4%; from 2022 to 2024, the Chinese market will grow at a CAGR of 10.55%, significantly higher than the global 7.84% growth rate, with an expected breakthrough of over 50 billion yuan in 2030. Global pattern converges, drawing lessons from the U.S. experience, with government support and mergers and acquisitions as key drivers for industry development. The global EDA market presents a highly concentrated feature, with Synopsys, Cadence, and Siemens EDA as the three giants dominating the market. Their market position is not simply dependent on endogenous research and development, but rather formed through decades of systematic mergers and acquisitions to establish a complete tool chain barrier. The United States has built a technological and ecological advantage in the EDA industry through a dual-drive model of "military incubation + capital catalysis," combined with long-term policy support and industry-academia-research collaboration, providing important reference for the development of the domestic industry. Behind the high growth of domestic products lies structural bottlenecks to be broken. Benefiting from the promotion of independent and controllable semiconductors, the growth rate of the Chinese EDA market is significantly higher than the global average. However, the industry faces four core bottlenecks: fragmented competition caused by enterprise focus on "point tools," integration difficulties exacerbated by capital market listings, a shortage of tens of thousands of high-end interdisciplinary talents, and barriers to entry formed by the international "tool-process-design" ecological alliance, hindering the leap from "point breakthroughs" to "systematic replacements" of domestic EDA. Clear policy orientation, integration and synergy to drive industry upgrades. The industry's development logic is shifting from "fragmented competition" to "platform-based collaboration," and at the policy level, there is potential to establish an "anti-exhaustion, promote integration" industrial governance system. This can be achieved through guiding capital markets, nurturing platform-type enterprises, constructing public technology infrastructure, and providing ecological policy support, all to promote industry upgrades. Risk warning: - Technological research and development risks - Uncertainty in the domestication process of EDA - Mergers and acquisitions progress lower than expected - International trade frictions - Calculations not meeting expectations, etc.