Major EDA Players Resume Sales
Synopsys and Cadence Design Systems both announced they were resuming availability of their EDA tools for Chinese customers, joining Germany’s Siemens in reopening access to one of the world's largest semiconductor markets.
The decision marks a notable shift in U.S.-China trade dynamics and offers a welcome reprieve for the EDA sector’s dominant players. Cadence derives roughly 12% of its annual revenue from China, while Synopsys relies on the country for about 16% of its sales.
Stock Market Reaction
The news triggered strong gains in early trading. Synopsys shares climbed 6.7% and Cadence rose 5.9% in U.S. pre-market trading. Siemens, which trades in Frankfurt, also posted a smaller gain of 0.9%.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, called the move:
“A distinct warming of relations and a small ceasefire in the chips war.”
Context of U.S.-China Tech Tensions
For years, successive U.S. administrations have sought to limit China’s access to advanced technology, aiming to slow the country’s artificial intelligence development and curb its semiconductor ambitions.
These curbs, announced in late May, temporarily halted EDA software exports and forced companies like Synopsys to suspend recently issued annual and quarterly forecasts in response to the sudden loss of access.
China’s domestic semiconductor industry, meanwhile, has ramped up production with the help of government subsidies, leading to increased local design activity and sustained demand for EDA tools.
Impact on Earnings and Mergers
Analysts at Mizuho noted that the export restrictions would likely have impacted only about a month's worth of revenue for Synopsys and Cadence in the current quarter.
They also pointed out that the uncertainty had cast a shadow over Synopsys’ proposed $35 billion acquisition of engineering software firm Ansys, with fears Chinese regulators might delay or block the deal as retaliation for U.S. restrictions.
With the curbs now lifted, Mizuho analysts said they expect the merger could close by the July 15 deadline, or at minimum continue moving toward completion in 2025.
Industry Outlook
While the easing of restrictions offers short-term relief, the broader U.S.-China technology rivalry remains a source of ongoing tension and risk for the semiconductor industry.
For now, however, EDA giants and investors are welcoming this de-escalation as an opportunity to stabilize sales in a critical market and restore confidence in forward-looking growth plans.