Washington: The United States has implemented sweeping export restrictions on a range of advanced technologies and materials destined for China, a move expected to further intensify trade tensions between Washington and Beijing. According to three individuals familiar with the matter, the U.S. government has halted shipments from numerous companies unless they obtain special export licenses, while also revoking previously approved permits.
The targeted restrictions appear strategically focused on critical chokepoints in key sectors such as semiconductors and aerospace. Affected items include electronic design automation (EDA) software used in chip development, industrial chemicals like butane and ethane, specialized machine tools, and aviation-related equipment.
Over the past few days, many U.S. firms received formal notifications from the Department of Commerce outlining the new restrictions. Two sources confirmed that letters were sent to companies producing EDA software last Friday, stating that licenses would now be required to continue supplying Chinese clients.
Among the software companies named were Cadence Design Systems, Synopsys, and Siemens EDA. Although not a blanket ban, the Commerce Department will evaluate export license applications on a case-by-case basis, indicating a selective and strategic approach.
While it remains unclear whether these measures are part of a broader strategy to gain leverage in stalled trade talks, they underscore growing U.S. efforts to curtail China’s access to critical technology. A spokesperson for the Commerce Department stated the agency is currently “reviewing exports of strategic significance to China” and, in some cases, “has suspended existing export licenses or imposed additional requirements while the review is ongoing.”
The White House has not issued a statement in response to inquiries about the new measures.
The financial impact was quickly felt across markets. Cadence shares closed down 10.7%, while Synopsys saw a 9.6% drop. However, both companies rebounded modestly in after-hours trading, gaining about 3.5% following Synopsys’ reaffirmation of its 2025 revenue forecast.
Synopsys CEO Sassine Ghazi clarified during an earnings call that the company had not yet received any official correspondence from the Bureau of Industry and Security (BIS), which oversees export control enforcement. “We are aware of the reporting and speculations, but Synopsys has not received a notice from BIS … We have not received a letter,” Ghazi stated.
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Siemens EDA has yet to comment on the developments.
Industry experts say any move to limit these companies’ access to Chinese customers could disrupt their revenue streams and severely impact China’s semiconductor industry, which heavily depends on U.S. chip design software.
“They are the true choke point,” noted a former Commerce Department official, highlighting that such restrictions have been under consideration since the Trump administration but were previously deemed too aggressive.
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China remains a significant revenue source for these firms. Synopsys generates roughly 16% of its annual revenue from China, while Cadence relies on the country for about 12%.
Synopsys supplies advanced software and hardware tools to major global chipmakers including Nvidia, Qualcomm, and Intel, aiding in the development of cutting-edge processors.
The Financial Times had earlier reported that the Trump administration directed software firms to halt sales of their services to Chinese companies.
