Overview

• On May 23, the Commerce Department’s Bureau of Industry and Security sent letters directing Cadence Design Systems, Synopsys and Siemens EDA to stop supplying electronic design automation software to Chinese customers.
• Those three firms account for about 80 percent of China’s EDA market and face significant revenue exposure after China made up roughly 16 percent of Synopsys’ and 12 percent of Cadence’s 2024 sales.
• The restrictions threaten to disrupt China’s semiconductor development workflows and are expected to accelerate Beijing’s drive for homegrown EDA solutions, boosting domestic players like Empyrean Technology, Primarius and Semitronix.
• This move follows earlier US limits on Nvidia’s H20 AI chips and marks a shift toward tighter software controls as part of the administration’s strategy to curb China’s AI and semiconductor advances.
• Analysts warn the directive could jeopardize the fragile 90-day tariff truce from May’s Geneva negotiations by highlighting tensions between US trade diplomats and national security hawks.