U.S. Moves to Block China from Accessing Key Chip Software

U.S. Moves to Block China from Accessing Key Chip Software

The Trump-led U.S. government has reportedly directed American tech firms involved in chip design software to cut off Chinese clients from accessing their services. This was revealed in a Financial Times report on Wednesday, quoting sources close to the development.

The move affects top electronic design automation (EDA) firms like Cadence, Synopsys, and Siemens EDA, who were said to have received orders from the U.S. Commerce Department to immediately stop supplying their technologies to certain Chinese companies.

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Following the directive, the stock market reacted sharply. Cadence’s shares fell by 10.7%, while Synopsys also recorded a 9.6% drop.

This clampdown is the latest in Trump’s aggressive efforts to curtail China’s rise in the global tech space. Apart from threatening widespread tariffs on Chinese goods, Washington has also been introducing tighter rules to hinder China’s ability to build high-end AI chips.

Reacting to the development, a spokesperson for the Commerce Department said they are reviewing technology exports that hold strategic value. The official also noted that in some cases, previously approved licenses have been paused, and additional approval steps introduced, pending the outcome of the review.

China remains a major market for the companies involved. Synopsys earns about 16% of its yearly revenue from China, while Cadence pulls around 12% from the same region.

When approached for comments, Cadence declined, while Synopsys and Siemens EDA were yet to respond at the time of filing this report.

According to the Financial Times, the order was issued by the Bureau of Industry and Security. One former Commerce official disclosed that similar restrictions had been under discussion since Trump’s first term but were shelved at the time over concerns that they might be too extreme.