The new restrictions affect design software and chemicals for semiconductors, butane and ethane, machine tools, and aviation equipment, and are likely to exacerbate current trade tensions with China.
Cadence, Synopsys and Siemens EDA were among the EDA companies to receive a letter from the US authorities which now requires them to obtain licenses to ship to Chinese customers.
According to sources close to the US government, the US Commerce Department will review requests for licenses on a case-by-case basis, which suggests that this is not an outright ban.
Shares in both Cadence and Synopsys have taken a significant hit as the news emerged although it’s unclear whether these restrictions are simply part of a broader negotiation strategy on the part of the Trump administration – talks are ongoing with China regarding trade and tariffs.
Interestingly, Synopsys said that while it was aware of the reporting and speculations, it has yet to receive any formal notification.
Such a move would have significant financial implications for EDA companies, as well as hitting Chinese chip design customers who rely in US-sourced EDA software.
Synopsys relies on China for about 16% of its annual revenue, and China accounts for about 12% of annual revenue for Cadence.
