The White House has ordered U.S. semiconductor software companies to stop selling their technology to Chinese firms. This directive comes from the Department of Commerce’s Bureau of Industry and Security. It aims to slow down China’s ability to develop advanced chip technology, especially in artificial intelligence.
The order affects major companies like Cadence, Synopsys, and Siemens EDA. These firms provide Electronic Design Automation software, which is essential for designing modern semiconductor chips. The move follows restrictions put in place earlier this year on Nvidia’s AI chip exports to China. It also builds on limits set during the Biden administration in 2022.
China relies heavily on U.S. EDA software, with American companies holding around 80 percent of that market in China. Stopping sales is expected to reduce China’s progress in developing cutting-edge chips. Synopsys has not yet received a formal notice but expects revenue from China to drop as a result.
The announcement caused stock prices to fall for Synopsys, Cadence, and Ansys, a company that is being considered for acquisition. In response, Chinese EDA companies such as Empyrean Technology, Primarius, and Semitronix are increasing their market activities to fill the space left by U.S. firms.
This action reflects ongoing tensions between the U.S. and China despite a fragile trade truce. Taiwan, where many of the world’s most advanced chips are made, is also affected by U.S. tariffs. Experts warn that the trade peace may not last if such restrictions continue to increase.
The U.S. government’s decision is part of a broader effort to keep its technological edge over China. Semiconductor chips are key to many modern technologies, including AI. By limiting China’s access to critical software, the U.S. hopes to slow its rival’s progress in these areas.
