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US curbs chip design software, chemicals, other shipments to China

By Karen Freifeld

(Reuters) -The United States has ordered a broad swathe of companies to stop shipping goods to China without a license and revoked licenses already granted to certain suppliers, said three people familiar with the matter.

The new restrictions - which are likely to escalate tensions with Beijing - appear aimed at choke points to prevent China from getting products necessary for key sectors, one of the people said.

Products affected include design software and chemicals for semiconductors, butane and ethane, machine tools, and aviation equipment, the people said.

Many companies received letters from the U.S. Department of Commerce over the last few days informing them of the new restrictions.

Firms that supply electronic design automation (EDA) software for semiconductors were sent letters last Friday that licenses would now be needed to ship to Chinese customers, two of the sources said.

The electronic design automation software makers include Cadence, Synopsys and Siemens EDA, a subsidiary of Siemens, one said.

The two sources said the Commerce Department will review requests for licenses to ship to China on a case-by-case basis, suggesting the action was not an outright ban.

It is unclear whether the new restrictions are part of a broader strategy to create leverage for trade talks during a pause in the imposition of higher tariffs.

The Commerce Department said it is reviewing exports of strategic significance to China, while noting "in some cases, Commerce has suspended existing export licenses or imposed additional license requirements while the review is pending."

The White House did not immediately respond to a request for comment.

Shares of Cadence, which declined to comment, closed down 10.7% and shares of Synopsys fell 9.6%.

Siemens said it was assessing the impact of the new restrictions on exports of EDA software and will provide more information as soon as possible.

China's foreign ministry said in a response to Reuters' questions that such U.S. practices disrupted the stability of global supply chains and that Washington was weaponizing tech and trade issues to shut out and persecute China.

"There are no sanctions or pressure that can block the pace of China's development and progress, no bullying or coercion that can shake China's determination to achieve self-sufficiency," it said.

Synopsys' CEO Sassine Ghazi said in a call with analysts that the company had not received a letter nor had it heard from the Commerce Department's Bureau of Industry and Security, which enforces export controls.