The decision is aimed at tightening Beijing's access to essential products in the field of chip design and manufacturing.
According to Reuters, the US Department of Commerce has asked many companies to stop supplying goods to China without a license, and revoked licenses granted to some suppliers. The affected products include chip design software (EDA), semiconductor chemicals, Butan, ethan, aviation equipment and tools. Many companies have received letters of notification about the new regulations in the past few days.
Electronic automatic design software (EDA) providers such as Cadence, Synopsys and Siemens EDA are said to have received a letter from the US Department of Commerce on May 23, requesting a license if they want to continue providing software to customers in China. However, two sources said that licensing requests will be considered on a case-by-case basis, suggesting that this is not a complete ban.
A US trade official confirmed that he is reviewing exports of strategically valuable goods to China, saying that some existing licenses have been suspended or required to supplement conditions while waiting for reviews. The White House has not commented.
The impact of the new regulation has been reflected immediately in the stock market. Cadence's stock fell 10.7%, while Synopsys' stock fell 9.6% at closing. After the trading hour, both companies recovered slightly with an increase of 3.5%. Synopsys confirmed that it has not received a letter from the Department of Industry and Security of the US Department of Commerce, and kept its 2025 revenue forecast unchanged.
Limited supply of chip design software could seriously affect US companies and Chinese customers, as China still relies heavily on leading US software tools. Synopsys earns about 16% of its annual revenue from China, while that rate for Cadence is 12%.
A former US Commerce Department official said EDA software was a real bottleneck in the semiconductor industry, and the regulations to control the software had been considered since the Trump administration but were considered too drastic at the time.
