President Donald Trump is stepping up US efforts to cut off China’s access to advanced technology, marking a continuation of restrictions first launched in his first term and continued under the Biden administration.
The primary victims of these technology bans are American companies that were once China’s preferred suppliers. The main beneficiaries are Chinese companies, some of which have been handed massive market opportunities stripped of their most formidable foreign competitors.
This has most recently been illustrated by new restrictions on exports to China of US semiconductor design technology, Nvidia’s H20 AI processor and jet engines for passenger aircraft.
Last week, the Bureau of Industry and Security of the US Department of Commerce ordered electronic design automation (EDA) software providers serving the semiconductor industry to halt shipments to Chinese customers.
On the news, the share prices of the world’s top two EDA companies, Synopsys and Cadence Design, dropped by more than 13% and then recovered to finish down 6% and 8%, respectively, in the week to Friday, May 30. The third major EDA supplier, the US company formerly known as Mentor Graphics now owned by Germany’s Siemens, is no longer publicly traded.
According to market research organization TrendForce, Synopsys, Cadence Design, and Siemens have 31%, 30%, and 11% of the global EDA market , respectively. China accounted for 16% and 12% of Synopsys’ and Cadence’s EDA sales in 2024. Siemens does not provide a geographical breakdown of its EDA sales.
As EETimes reports, EDA is seen as “the true choke point” in China’s semiconductor industry, particularly with regard to artificial intelligence (AI) processors and other advanced integrated circuits (ICs).
In addition, according to Cadence, the BIS wrote that the sale of EDA software to Chinese companies constitutes“an unacceptable risk of use in or diversion to a ‘military end use’ in China or for a Chinese ‘military end user.’”
In theory, exports of EDA tools to Chinese customers would be allowed under BIS license; in practice, licenses are extremely unlikely to be forthcoming. For this reason, Synopsys has reportedly shut down its EDA sales and service operations and told its local staff to stop taking new orders in China.
EDA export restrictions were first considered during the previous Trump administration, but until now have reportedly been rejected because they were considered too aggressive. Now they are part of Trump’s strategy to ramp up pressure on China in pursuit of a broad trade deal.
Last year, Synopsis, Cadence Design and Siemens held approximately 80% of the Chinese EDA market, but that figure is already in decline. Synopsys’ sales in China dropped 28% year-on-year in the first half of its fiscal 2025 (the six months to April), with the share of its total sales made there falling from a peak of 17% in Q3 of fiscal 2024 to 10% in Q2 of 2025.
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