Trump Administration Moves to Block U.S. Chip Design Software Sales to China

The Trump administration has reportedly instructed U.S. firms that provide electronic design automation (EDA) software, crucial for semiconductor development, to halt sales to Chinese companies, according to the Financial Times. The directive, reportedly communicated via letters from the Commerce Department, targets leading EDA software makers including Synopsys (NASDAQ:SNPS), Cadence, and Siemens EDA.

Though the Commerce Department declined to confirm the letters, it stated that it is reviewing exports of strategic value to China and, in some cases, has suspended export licenses or added new requirements. This potential restriction could significantly impact Chinese chip design companies, which rely heavily on U.S. EDA tools, as well as the revenue streams of American suppliers.

Synopsys, which earns about 16% of its revenue from China, stated it has not received any communication from the Bureau of Industry and Security (BIS). CEO Sassine Ghazi reiterated the company’s full-year revenue guidance, citing no official changes in its export situation. Cadence, which derives roughly 12% of its revenue from China, declined to comment. Siemens EDA has yet to respond.

Following the report, Cadence shares fell 10.7% and Synopsys shares dropped 9.6%. However, both stocks rebounded 3.5% in after-hours trading after Synopsys reaffirmed its 2025 revenue forecast.

Industry experts describe U.S. EDA software as a critical choke point in global semiconductor development. The policy marks a continuation of longstanding U.S. efforts to limit China's access to advanced chipmaking technologies, echoing earlier export controls under the Trump administration. If confirmed, this shift could disrupt China’s semiconductor ambitions and reshape global chip design supply chains.