US electronic design automation software makers were told via letters to stop supplies to China, the FT reported.
United States President Donald Trump’s administration has ordered US firms that offer software used to design semiconductors to stop selling their services to Chinese groups, the Financial Times has reported, citing people familiar with the move.
Electronic design automation software makers, which include Cadence, Synopsys and Siemens EDA, were told via letters from the US Commerce Department to stop supplying their tech, the report, which was published on Wednesday, said.
A spokesperson for the Commerce Department declined to comment on the letters but said it is reviewing exports of strategic significance to China, while noting that, “in some cases, Commerce has suspended existing export licenses or imposed additional license requirements while the review is pending”.
Shares of Cadence, which declined to comment, closed down by 10.7 percent, while shares of Synopsys fell by 9.6 percent.
Synopsys CEO Sassine Ghazi said in a call with analysts that the company had not received a letter, nor had it heard from the Commerce Department’s Bureau of Industry (BIS) and Security, which enforces export controls.
“We are aware of the reporting and speculations, 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 year-over-year decline in China. We have not received a letter,” Ghazi said.
After the market closed, Synopsys reaffirmed its revenue forecast for 2025. Its shares and those of Cadence bounced back 3.5 percent in trading after the close.
Siemens EDA did not immediately respond to a request for comment.
The software of these firms is used to design both high-end processors as well as simpler products.
While the scope of the policy change described in the report was not immediately clear, any move to strip the software makers of their Chinese customers could deal a blow to their bottom line and to their Chinese chip design customers, which heavily rely on top-of-the-line US software.
“They are the true choke point,” said a former Commerce Department official, who added that rules restricting the export of EDA tools to China have been under consideration since the first Trump administration, but were ruled out as too aggressive.
Synopsys relies on China for about 16 percent of its annual revenue, while China accounts for about 12 percent of annual revenue for Cadence.
Synopsys, which partners with chip companies such as Nvidia, Qualcomm and Intel, provides software and hardware used for designing advanced processors.