US Moves to Block EDA Software Sales to China

On May 29, 2025, the Trump administration intensified its technological restrictions on China by directing major U.S. electronic design automation (EDA) software providers—including Synopsys, Cadence Design Systems, and Siemens EDA—to cease sales to Chinese entities without obtaining export licenses. This move aims to impede China’s advancement in semiconductor and artificial intelligence (AI) technologies.

The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) issued letters to these companies, mandating the halt of EDA software sales to Chinese firms. While Synopsys reported not receiving a formal notice, it acknowledged the potential impact on its operations. Cadence and Siemens EDA have not publicly commented on the directive.

EDA tools are crucial for designing advanced semiconductors, and U.S. firms dominate approximately 80% of the global market. China’s reliance on these tools makes the restriction particularly significant, potentially hindering its chip development capabilities.

The announcement led to a notable decline in the stock prices of the affected companies. Shares of Cadence and Synopsys fell by 10.7% and 9.6%, respectively, before partially recovering in after-hours trading.

This action follows previous U.S. measures to limit China’s access to advanced technologies, including restrictions on AI chip exports. Analysts suggest that while these controls aim to maintain U.S. technological superiority, they may also prompt China to accelerate the development of its domestic EDA tools, potentially reshaping the global semiconductor landscape.

The broader implications of these restrictions are still unfolding, with potential impacts on global supply chains and the ongoing U.S.-China trade negotiations.