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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 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, 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.”
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. None of the three companies immediately responded to requests for comment.
In fiscal year 2024, Synopsys reported almost $1bn in China sales, roughly 16 per cent of its revenue. Cadence said China accounted for 12 per cent of its revenue, about $550mn.
Synopsis shares were down about 11 per cent on Wednesday, while Cadence shares were down about 9 per cent.
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.
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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 simulation software company, for $35bn. The deal still requires approval from Chinese regulators. Ansys shares were down about 5 per cent on Wednesday.
The export restrictions have encouraged Chinese competitors, with three leading EDA firms — Empyrean Technology, Primarius and Semitronix — significantly growing their market share in recent years.
