The IPO application of Beijing-based Empryean, an electronic design automation (EDA) software provider, was accepted for a stock offering on Shenzhen’s Nasdaq-style ChiNext board, the city’s stock exchange announced on June 22. Empyrean’s software solutions are used in the design and production of integrated circuits and wafer fabrication.
Riding strong investor momentum in China’s semiconductor sector, Empyrean is looking to raise RMB 2.55 billion (USD 393 million) in the public offering. The company’s annual revenue has steadily increased in recent years from RMB 140 million in 2018 to RMB 250 million in 2019, then reaching RMB 410 million (USD 63 million) in 2020. Net profit grew more than 80% from RMB 57.15 million in 2018 to RMB 104 million in 2020.
Empyrean is breaking into a sector in China that is largely dominated by foreign firms like Kaden Electronics, Synopsys, and Siemens. Compared to the startup’s 6% market share in 2020, the three industry leaders together control around 80% of the market, according to data from the China Center for Information Industry Development, a think tank under China’s Ministry of Industry and Information Technology.
The value of global EDA sales reached USD 7.24 billion in 2020, up 10.7% year-on-year, with North America making up 40.7% of the total compared to the Asia Pacific region’s 42.1% and Europe’s 17%.
Empyrean aims to cover the entire EDA industry chain, a feat that the three multinational industry leaders have managed, but domestic companies have so far failed to achieve. Other domestic peers in the EDA sector, including Cellix and Guangli Micro, are looking to tap public capital markets for funding, but Cellix’s application was denied in December 2020, and Guangli Micro is yet to apply.
36Kr Connection features translated and adapted content published by 36Kr. This article was originally written by Qiu Xiaofen for 36Kr.