Washington, D.C. — May 30, 2025 — In a significant escalation of U.S.-China technology tensions, the Trump administration has directed leading American electronic design automation (EDA) companies—Cadence Design Systems, Synopsys, and Siemens EDA—to cease sales of semiconductor design software to Chinese entities. This directive, issued by the U.S. Department of Commerce’s Bureau of Industry and Security (BIS), aims to curb China’s advancements in artificial intelligence and military technologies by restricting access to critical chip design tools.
Collectively, these firms dominate approximately 80% of China’s EDA market, providing essential software for designing advanced semiconductors used in various applications, including consumer electronics, data centers, and defense systems. The BIS has cited national security concerns, emphasizing the risk of these tools being utilized for military purposes by Chinese entities .
In response to the directive, Synopsys has suspended all sales and services in China and halted acceptance of new orders, as detailed in an internal memo . Cadence and Siemens EDA have acknowledged the new licensing requirements and are assessing the impact on their operations. Siemens stated, “The new requirements are complex, and we are engaging with BIS to obtain further clarification, as we assess the impact on our business and financial results” .
The announcement has had immediate financial repercussions. Shares of Cadence and Synopsys dropped by approximately 10% following the news, reflecting investor concerns over potential revenue losses from the Chinese market.
Industry leaders have expressed apprehension regarding the broader implications of the export restrictions. Nvidia CEO Jensen Huang criticized the policy, stating that such measures could inadvertently accelerate China’s development of indigenous technologies, thereby diminishing the global competitiveness of U.S. firms.
This move follows previous actions by the Trump administration to limit China’s access to advanced semiconductors, including restrictions on the export of Nvidia’s AI chips. The cumulative effect of these policies underscores the administration’s commitment to maintaining U.S. technological leadership and addressing national security concerns.
