Trump Administration Bans Sales of Chip Design Software to China, Escalating Tech Tensions

Trump bans sales of chip design software to China

The Trump administration has told US companies that offer software used to design semiconductors to stop selling their services to Chinese groups, in the latest attempt to make it harder for China to develop advanced chips. Several people familiar with the move said the US Department of Commerce had told so-called electronic design automation groups -- which include Cadence, Synopsys and Siemens EDA -- to stop supplying their technology to China. The Bureau of Industry and Security, the arm of the US commerce department that oversees export controls, issued the directive to the companies via letters, according to the people. It was unclear if every US EDA company had received a letter. The move marks a significant new effort by the administration to stymie China's ability to develop leading-edge artificial intelligence chips, as it seeks a technological advantage over its geopolitical rival. In April, Washington restricted the export of Nvidia's China-specific AI chips. On its second-quarter earnings call on Wednesday, Synopsys chief executive Sassine Ghazi said: "We are aware of the reporting and speculation, but Synopsys has not received a notice from BIS. So, our guidance that we are reiterating for the full year reflects our current understanding of BIS export restrictions, as well as our expectations for a year-over-year decline in China [revenue]." An official from the commerce department said it was "reviewing exports of strategic significance to China. In some cases, [the department] has suspended existing export licences or imposed additional licence requirements while the review is pending." The directive comes at a delicate time as the US and China try to reach a trade deal after both sides recently agreed in Geneva to pause tit-for-tat tariffs for 90 days. The Financial Times reported last month that the Trump administration intended to put a number of Chinese chipmakers on a blacklist that would make it extremely difficult for US companies to provide them with American technology. But some officials pushed for a delay to avoid jeopardising the two countries' trade talks. Christopher Johnson, a former CIA China analyst, said the new export controls underscored the "innate fragility of the tariff truce reached in Geneva. With both sides wanting to retain and continue demonstrating the potency of their respective chokehold capabilities, the risk the ceasefire could unravel even within the 90-day pause is omnipresent." Johnson, who heads China Strategies Group, a risk consultancy, said that China had successfully leveraged its stranglehold on rare earths to bring the US to the negotiating table in Geneva, which "left the Trump administration's China hawks eager to demonstrate their export control weapons still have purchase." While it accounts for a relatively small share of the overall semiconductor industry, EDA software allows chip designers and manufacturers to develop and test the next generation of chips, making it a critical part in the supply chain. Synopsys, Cadence Design Systems and Siemens EDA -- part of Siemens Digital Industries Software, a subsidiary of Germany's Siemens AG -- account for about 80 percent of China's EDA market. Synopsys and Cadence did not immediately respond to requests for comment. In fiscal year 2024, Synopsys reported almost $1 billion in China sales, roughly 16 percent of its revenue. Cadence said China accounted for $550 million or 12 percent of its revenue. Synopsys shares fell 9.6 percent on Wednesday, while those of Cadence lost 10.7 percent. Siemens said in a statement the EDA industry had been informed last Friday about new export controls. It said it had supported customers in China "for more than 150 years" and would "continue to work with our customers globally to mitigate the impact of these new restrictions while operating in compliance with applicable national export control regimes." In 2022, the Biden administration introduced restrictions on sales of the most sophisticated chip design software to China, but the companies continued to sell export control-compliant products to the country. In his first term as president, Donald Trump banned China's Huawei from using American EDA tools. Huawei is seen as an emerging competitor to Nvidia with its "Ascend" AI chips. Nvidia chief executive Jensen Huang recently warned that successive attempts by American administrations to hamstring China's AI ecosystem with export controls had failed. Last year Synopsys entered into an agreement to buy Ansys, a US simulation software company, for $35 billion. The deal still requires approval from Chinese regulators. Ansys shares fell 5.3 percent on Wednesday. On Wednesday the US Federal Trade Commission announced that both companies would need to divest certain software tools to receive its approval for the deal. The export restrictions have encouraged Chinese competitors, with three leading EDA companies -- Empyrean Technology, Primarius and Semitronix -- significantly growing their market share in recent years. Shares of Empyrean, Primarius and Semitronix rose more than 10 percent in early trading in China on Thursday. © 2025 The Financial Times Ltd. All rights reserved. Not to be redistributed, copied, or modified in any way.

US imposes new rules to curb semiconductor design software sales to China | TechCrunch

It appears the Trump administration has imposed new export controls on chip design software as it seeks to further undermine China's ability to make and use advanced AI chips. Siemens EDA, Cadence Design Systems and Synopsys all confirmed that they have received notices from the U.S. Commerce Department about new export controls on electronic automation design (EDA) software to China. EDA tools are primarily used to aid with the design and validation of semiconductor manufacturing, testing, and for monitoring performance and quality. They are used by chip foundries, chipmakers, networking hardware companies, the automotive industry, and many more. Siemens EDA, a division of German tech conglomerate Siemens, told TechCrunch that it has received a notice from the Commerce Department's Bureau of Industry and Security (BIS) last week about new export controls on EDA software to China and Chinese military end users. "Siemens has supported customers in China for more than 150 years and will continue to work with our customers globally to mitigate the impact of these new restrictions while operating in compliance with applicable national export control regimes," the company said. U.S.-based Synopsys, which also makes EDA software, said on Thursday that it had also received a similar letter from the BIS. The company also suspended its forecast for the third quarter and full-year 2025. Cadence also received a notice from the BIS saying a license is now required for "the export, re-export or in-country transfer of electronic design automation software" to customers in China. The news was first reported by The Financial Times. The new export rules come as the U.S. ramps up its efforts to hinder Chinese companies as the battle for AI supremacy heats up. But these export controls are increasingly hurting the U.S. chip industry, which has long enjoyed significant market share in China. Nvidia alone has incurred billions in losses due to restrictions on sales of its H20 and Hopper AI chips to Chinese customers. The company, along with rival AMD, is even said to be working on selling lower-powered versions of its AI chips to Chinese customers. The U.S. Commerce Department did not immediately return a request for comment outside regular business hours.

Trump orders US chip designers to stop selling to China

Demetri Sevastopulo in Washington, Zijing Wu in Hong Kong and Michael Acton in San Francisco The Trump administration has told US companies that offer software used to design semiconductors to stop selling their services to Chinese groups, in the latest attempt to make it harder for China to develop advanced chips. Several people familiar with the move said the commerce department had told Electronic Design Automation groups, which include Cadence, Synopsys and Siemens EDA, to stop supplying their technology to China. The Bureau of Industry and Security, the arm of the US commerce department that oversees export controls, issued the directive to the companies via letters, according to the people. It was unclear if every US EDA had received a letter. The move marks a significant new effort by the US administration to stymie China's ability to develop leading-edge artificial intelligence chips, as it seeks a technological advantage over its geopolitical rival. In April, the administration restricted the export of Nvidia's China-specific AI chips. A commerce department official said it was "reviewing exports of strategic significance to China". "In some cases, commerce has suspended existing export licenses or imposed additional license requirements while the review is pending," said a commerce department official. While it accounts for a relatively small share of the overall semiconductor industry, EDA software allows chip designers and manufacturers to develop and test the next generation of chips, making it a critical part in the supply chain. Synopsys, Cadence Design Systems and Siemens EDA account for about 80 per cent of China's EDA market. In 2022, the Biden administration introduced restrictions on sales of the most sophisticated chip design software to China, but the companies continued to sell export control-compliant products to the country.

Trump blocks China from key semiconductor design software

Serving tech enthusiasts for over 25 years. TechSpot means tech analysis and advice you can trust. What just happened? The Trump administration has taken a decisive step in its campaign to restrict China's access to advanced semiconductor technology, instructing leading US companies that produce chip design software to halt sales to Chinese customers. Several people familiar with the matter have told the Financial Times that the US Department of Commerce's Bureau of Industry and Security recently sent letters to major electronic design automation (EDA) firms - including Synopsys, Cadence Design Systems, and Siemens EDA - directing them to stop supplying their technology to the Asian nation. These companies collectively control about 80 percent of China's EDA market, making them a critical part of the global semiconductor supply chain. EDA software, though a relatively small segment of the industry, is essential for designing and simulating new generations of chips, which underpin advancements in artificial intelligence and other cutting-edge technologies. The move comes as Washington intensifies efforts to curb Beijing's ambitions in artificial intelligence and advanced computing. Earlier this year, the administration also banned Nvidia from selling its H20 chips to Chinese clients, marking the third round of such restrictions since 2022. A Commerce Department spokesperson told the FT that the agency is "reviewing exports of strategic importance to China" and, in some cases, has "suspended existing export licenses or imposed additional licensing requirements while the review is pending." The impact of these restrictions was immediately felt on Wall Street. Shares of Synopsys and Cadence fell sharply, dropping 9.6 percent and 10.7 percent, respectively, following reports of the directive. In fiscal year 2024, China accounted for roughly 16 percent of Synopsys' revenue - almost $1 billion - and about 12 percent of Cadence's sales. Neither Cadence nor Siemens EDA responded to FT's requests for comment, while Synopsys CEO Sassine Ghazi stated during an earnings call, "We are aware of the reporting and speculation, but Synopsys has not received a notice from BIS. So, our guidance that we are reiterating for the full year reflects our current understanding of BIS export restrictions, as well as our expectations for a year-over-year decline in China [revenue]." The timing of the directive is especially sensitive, as the US and China are engaged in delicate trade negotiations. Both sides recently agreed to a 90-day pause on new tariffs after talks in Geneva, but the new export controls underscore the fragility of this truce. The broader context for these measures is a deepening technological rivalry between the world's two largest economies. The US has progressively tightened export controls on semiconductor technology to maintain its edge and prevent China from developing its advanced chips. In response, China has accelerated its push for self-sufficiency, investing heavily in domestic chipmakers and EDA software developers. While US and German firms still dominate the EDA market in China, local competitors such as Empyrean Technology, Primarius, and Semitronix have made significant gains, with their shares rising more than 10 percent in early trading following the news of the US directive. The restrictions are already reshaping the semiconductor landscape. US companies face the prospect of reduced revenues and diminished competitiveness in the world's largest semiconductor market, while Chinese firms are under pressure to innovate and replace foreign technology.

US tightens tech grip, bans key chip software sales to China

The Trump administration has previously blacklisted several Chinese chipmakers and banned exports of high-end chip tools and software. U.S. President Donald Trump has just fired a fresh salvo in the tech war with China. In a move that escalates Washington's efforts to cripple Beijing's semiconductor ambitions, the Trump administration has directed top U.S. chip design software firms, including Synopsys, Cadence Design Systems, and Siemens EDA, to halt sales to Chinese customer, Financial Times reported on Wednesday. The directive, issued through letters from the Bureau of Industry and Security (BIS), marks a significant tightening of export controls on technology critical to designing next-generation AI and advanced chips.

Chip Software Stocks Tumble on Report Trump Orders They Stop Selling to China

Colin is an Associate Editor focused on tech and financial news. He has more than three years of experience editing, proofreading, and fact-checking content on current financial events and politics. He received his M.A. in journalism from The New School and his B.A. in history and political science from McGill University. Shares of semiconductor software companies sank, weighed down by a report that they had been caught up in the Trump administration's efforts to hamstring China's ability to develop sophisticated artificial intelligence. The Financial Times on Wednesday reported the White House had instructed companies that sell software used to design semiconductors to stop providing their services to Chinese clients. Shares of Cadence Design Systems (CDNS) and Synopsys (SNPS) tumbled 10.7% and 9.6%, respectively, on Wednesday. Those companies did not respond to Investopedia's requests for comment in time for publication. The report arrived ahead of Nvidia's (NVDA) report of its latest quarterly financial results, with the chip giant saying it took a substantial financial hit -- though smaller than it initially thought -- after the White House in early April tightened restrictions on the export of advanced chips to China. Read Investopedia's full coverage of Nvidia's results here. The Trump administration has escalated the Biden administration's efforts to curb China's access to cutting-edge semiconductors. Nvidia in particular lost out on some revenue associated with its H20 chips, which it developed specifically to comply with Biden-era restrictions. Competitor Advanced Micro Devices (AMD) estimated it would take an $800 million hit for similar easons. Nvidia CEO Jensen Huang reportedly blasted U.S. export controls as "a failure" during an industry conference earlier this month. Huang argued the restrictions had encouraged local technology firms to develop sophisticated chips on their own, eroding U.S. firms' market share without preventing China's AI prospects. Trump earlier this month rescinded Biden's "AI diffusion rule," which would have expanded export restrictions and tightened existing controls. The administration says it will eventually issue its own rule to prevent US-made chips from reaching China via other countries.