Trump Reportedly Orders U.S. EDA Firms to Halt Exports to China

Insiders have revealed that the U.S. government is actively moving to tighten restrictions on the export of chip design software to China, marking a significant escalation in its ongoing effort to curb Beijing's progress in advanced semiconductor development.

According to sources familiar with the matter, the U.S. Department of Commerce's Bureau of Industry and Security (BIS) sent official letters last Friday to several leading electronic design automation (EDA) companies, requesting them to halt shipments of critical software tools to Chinese customers. The major players in the EDA sector include Cadence Design Systems, Synopsys, and Siemens.

A spokesperson for the Commerce Department stated, “The Department is reviewing exports to China that have strategic significance. In certain cases, BIS has paused existing export licenses or imposed additional license requirements during the review process.”

Following the news, Cadence shares dropped 10.7% to $288.61 in New York trading—its steepest single-day decline since the onset of the pandemic in March 2020. Synopsys fell 9.6% to $462.43, its sharpest drop since last December.

The scope of these restrictions remains unclear, but one insider suggested the measures could effectively bar EDA firms from doing business in China. Currently, approximately 16% of Synopsys' revenue and 12% of Cadence’s revenue are derived from the Chinese market.

Synopsys CEO Sassine Ghazi acknowledged reports about the Commerce Department's letter during a May 28 earnings call, but said the company has not yet received formal notice. “We cannot speculate on the potential implications of a notice we have not yet received,” he commented.

This move reflects a broader strategy by the U.S. to block China's ambitions of building a self-sufficient semiconductor ecosystem. Previous restrictions targeted the export of cutting-edge chipmaking equipment, and now the U.S. appears to be expanding its control to software that enables chip design.

Cadence and Synopsys software tools are critical for designing a wide range of electronic components—from high-performance processors used by tech giants like NVIDIA and Apple, to simpler chips used in power regulation and other basic functions.

The U.S. has also taken steps to block the flow of advanced semiconductor products to China. NVIDIA, in particular, has been a prime target due to its leadership in AI chip technology. Earlier this year, the U.S. banned the sale of NVIDIA's H20 chip to Chinese clients, marking the third wave of restrictions since 2022. NVIDIA CEO Jensen Huang has publicly expressed opposition to these limits.

At the moment, these new restrictions have not been fully confirmed.