US Commerce Department Restricts Semiconductor Design Software Exports to China

The U.S. Department of Commerce has prohibited American companies from supplying semiconductor design software to China without export licenses, as reported by Reuters citing two sources. Software developers, including Cadence, Synopsys, and Siemens, have already received a notice from the regulator to cease their shipments.

According to Reuters’ sources, the Department of Commerce will evaluate each license application for shipments to China on a case-by-case basis, meaning that the agency’s decision won’t result in a total ban.

A department representative stated that the regulator is assessing the export of strategically important goods to China. He noted that in some instances, the Department of Commerce has suspended existing export licenses or imposed additional requirements for permits while conducting reviews.

Following this announcement, shares of Cadence dropped by 10.7%, and Synopsys saw a decline of 9.6%. The CEO of Synopsys, Sassine Ghazi, mentioned that his company had not received any letters or clarifications from the U.S. Bureau of Industry and Security, which is part of the Department of Commerce.

Approximately 16% of Synopsys’s annual revenue comes from China, while this figure is 12% for Cadence. Synopsys collaborates with major chip manufacturers like Nvidia, Qualcomm, and Intel, providing software and hardware utilized for designing advanced processors.

Previously, the administration of former President Donald Trump demanded that U.S. semiconductor design software firms halt their services to Chinese companies, as reported by the Financial Times.