The U.S. Commerce Department has lifted export restrictions on chip design technologies to China, according to company statements released Wednesday evening. The move is part of a broader trade agreement recently reached between Washington and Beijing.
Shares of Synopsys Inc. (NASDAQ: SNPS) and Cadence Design Systems Inc. (NASDAQ: CDNS) surged following the announcement. In after-hours trading, Synopsys rose 6% to $555.00, while Cadence gained 5.1% to $326.99.
In a statement, Synopsys confirmed that the Commerce Department had informed the company that export restrictions imposed in late May were officially revoked, effective immediately. The firm added it was actively working to restore access for Chinese clients to the affected products.
Bloomberg also reported that Siemens AG (ETR: SIEGn) and Cadence had issued similar statements, although neither company was available for comment outside regular business hours. The Commerce Department also did not immediately respond to requests for comment.
Synopsys, Cadence, and Siemens are among the top three global suppliers of chip design tools. In late May, they were notified they would need to obtain licenses to export certain chip-related technologies—including design software and chemicals—to China.
The reversal of these restrictions signals progress in U.S.–China trade relations, following the announcement last month that the two countries had agreed on a framework trade agreement. China had previously identified U.S. export controls on chip technology as a key sticking point in trade talks.
Beijing also indicated last week that a trade truce with the U.S. was advancing. However, it remains uncertain whether this policy shift suggests broader easing of chip export restrictions. Some U.S. tech firms, like Nvidia (NASDAQ: NVDA), continue to face stringent controls that bar the export of high-performance AI chips to China.
Nvidia has criticized these rules, with CEO Jensen Huang describing U.S. export policy toward China as a “failure.”
The tightening of export restrictions began under President Joe Biden’s administration in 2022 and was further reinforced earlier this year under former President Donald Trump’s administration, with a specific focus on restricting China’s access to advanced artificial intelligence technologies.
Analysts: Easing of Ban Limits Financial Impact for EDA Firms
Mizuho analysts commented that the Commerce Department’s decision removes a key uncertainty for Synopsys and Cadence regarding their China operations. They now estimate only a one-month revenue impact from the temporary restrictions in the current quarter.
The policy reversal also strengthens Mizuho’s outlook that Synopsys’ proposed $35 billion acquisition of Ansys (NASDAQ: ANSS) could close by the July 15 deadline, or at least progress toward completion in 2025.
The Ansys merger is still under review by Chinese regulators, but a recent report suggested that Beijing’s approval process is in advanced stages.
