China’s National Integrated Circuit Fund Makes Fourth EDA Investment of 2024 in Unicorn Firm Hangxin Technology

China’s National Integrated Circuit Industry Investment Fund (commonly known as the National IC Fund) continues its strategic investment spree, marking its fourth EDA (Electronic Design Automation) funding of the year by acquiring a stake in Hangxin Technology. Earlier this year, the fund also invested in Jiu Tongfang, Shenzhen Hongxin Microelectronics, and Quanxin Intelligent Manufacturing. With this latest move, China’s EDA sector is poised for accelerated domestic development, addressing critical gaps in the industry.

National IC Fund Acquires a 7.27% Stake in Hangxin Technology

According to information from Tianyancha, Hangxin Technology recently underwent a shareholder restructuring. New investors include National IC Fund Phase II, while two previous shareholders exited. The company’s registered capital increased from RMB 8.96 million to RMB 9.66 million, and the National IC Fund Phase II now holds 7.27% of the company’s shares, with a capital contribution of RMB 703,000.

Headquartered in Hangzhou with R&D centers in Shanghai, Chengdu, Beijing, Xiamen, and Shenzhen, Hangxin Technology is a leading EDA company with fully independent intellectual property. Its Signoff Toolchain optimizes power, performance, and area (PPA), receiving recognition from multiple global top-tier semiconductor companies. Hangxin has established strategic partnerships to create a collaborative EDA ecosystem.

Pioneering Leadership and Technological Achievements

Hangxin’s founder, He Qing, is an alumnus of Zhejiang University and Purdue University. With professional experience at Broadcom and Oracle, He Qing has made groundbreaking advancements in EDA technologies, supported by Intel.

Recently, Hangxin received approval for the Integrated Circuit EDA Signoff Zhejiang Provincial Engineering Research Center, aimed at developing a unified Signoff toolchain. This milestone positions Hangxin as a significant contributor to China's EDA sector, with plans to bridge domestic technology gaps and achieve international standards.

Broader EDA Investments by the National IC Fund

This year, the National IC Fund has made significant investments across the EDA sector, including:

1. Shenzhen Hongxin Microelectronics: The National IC Fund Phase I acquired a 38.74% stake in September, investing RMB 496 million. Hongxin specializes in digital IC design automation and aims to establish a complete domestically produced digital EDA platform.

2. Quanxin Intelligent Manufacturing: In July, the National IC Fund Phase II became the third-largest shareholder with an 11.11% stake. Quanxin focuses on advanced process EDA development and production in collaboration with global leaders like Synopsys.

3. Jiu Tongfang: In April, the National IC Fund Phase II acquired a 7.78% stake during the company’s Series C round. Jiu Tongfang is a Wuhan-based EDA firm specializing in IC design services, particularly in RF circuits and high-frequency design.

The Growing Importance of China’s EDA Sector

China’s semiconductor industry association projects that the domestic EDA market will reach RMB 18.49 billion by 2025, capturing 18.1% of the global market share. However, nearly 40% of EDA tools still lack domestic alternatives, underscoring the critical need for technological advancements.

The National IC Fund’s investments are strategically aimed at accelerating domestic EDA solutions, enabling China to achieve greater self-sufficiency in a critical segment of the semiconductor supply chain.

Leading EDA Firms in China: Performance Overview

Several prominent domestic EDA companies have made notable progress:

• Huada Jiutian (Huada Nine Days): Revenue in Q3 2024 grew 27.69% YoY to RMB 299 million, but net profit declined due to increased R&D investment. The company continues to expand into RF, memory, and optoelectronics.

• Guanlun Electronics: Achieved Q3 revenue of RMB 83.1 million, up 19.34% YoY, with advancements in analog circuit tools and IC manufacturing solutions.

• Guangliwei Technology: Revenue reached RMB 287 million in the first three quarters, with significant investments in DFT design and yield analysis tools.

Conclusion

The National IC Fund’s investments underscore the strategic importance of EDA to China’s semiconductor industry. As the fund also engages in partial divestments to support reinvestment cycles, its focus on EDA reflects a commitment to strengthening China’s technology independence. With continued collaboration between state-backed funds and industry players, the domestic EDA sector is set to achieve robust growth and global competitiveness.