The Trump administration hardens its tech strategy and orders U.S. companies to stop selling chip design software to Chinese customers
In a new chapter of the escalating tech war between the United States and China, Donald Trump’s administration has ordered major U.S. electronic design automation (EDA) companies to suspend the sale of their software to Chinese clients. This was revealed by the Financial Times, citing sources close to the action.
The U.S. Department of Commerce, through its Bureau of Industry and Security (BIS), recently sent letters to companies like Synopsys, Cadence Design Systems, and Siemens EDA, instructing them to halt their technology supply to China. These companies dominate approximately 80% of the Chinese EDA software market, a critical sector for the design and simulation of advanced chips, essential in areas such as artificial intelligence, supercomputing, and defense.
A Strategic Offensive Amid Trade Tensions
The decision is part of a broader effort by Washington to curb Beijing’s technological advancement. By early 2025, the U.S. government had already banned NVIDIA from selling its H20 chips to Chinese companies, marking the third round of restrictions since 2022.
A spokesperson for the Department of Commerce confirmed to the Financial Times that the agency is reviewing exports considered strategic for China, and has in some cases suspended existing licenses or imposed new authorization requirements.
The announcement comes at a particularly delicate time, as both powers had just agreed to a 90-day tariff truce following negotiations in Geneva. However, the new export limitations highlight the precariousness of the current diplomatic balance.
Immediate Consequences for Wall Street and the Tech Sector
The stock market impact was swift. Shares of Synopsys and Cadence dropped sharply following the directive: down 9.6% and 10.7%, respectively. According to the latest financial results, China accounts for 16% of Synopsys’s revenue (around $1 billion) and 12% of Cadence’s sales.
Although Synopsys stated during a earnings call that it has not yet received official notification from the BIS, its CEO, Sassine Ghazi, acknowledged they are preparing for a revenue decline in the Chinese market over the fiscal year.
Neither Cadence nor Siemens EDA has issued official comments on the matter.
China Accelerates Its Technological Autonomy
In parallel, Beijing is intensifying its efforts to reduce dependence on foreign suppliers, with significant investments in domestic EDA software developers. Local companies like Empyrean Technology, Primarius, and Semitronix have seen their stocks rise over 10% following the announcement of new U.S. restrictions, signaling potential momentum for China’s domestic industry.
However, analysts agree that China’s technological transition will take years, given the complex ecosystem of tools and expertise dominated by U.S. and German companies.
A New Balance in the Global Semiconductor Landscape
Trump’s decision not only intensifies technological rivalry but also redefines the strategic map of the semiconductor industry. The affected U.S. companies risk losing competitiveness and market share in what is now the world’s largest chip market, while Chinese companies face the challenge of innovating against the clock.
This battle for control of future technologies promises to not only shape the pulse of relations between the world’s two leading powers but also set the pace of the global digital revolution.
via: techspot