Rizwan Siddiqui
2 min read
In This Article:
On Thursday, Reuters reported that the U.S. Commerce Department has issued notification letters to several Electronic Design Automation (EDA) software companies, including Cadence Design Systems Inc. (NASDAQ:CDNS), Synopsys Inc. (NASDAQ:SNPS) and Siemens EDA, asking them to halt the supply of their technologies to China.
Although no official statement or formal order has been issued, the report cites two individuals familiar with the matter as its source. The report added that companies seeking to continue exporting their EDA tools to China may be required to obtain new export licenses.
The Commerce Department has not confirmed whether these notifications were sent, but told Reuters it is reviewing exports that are considered strategically important to China. In some cases, the Department has already suspended existing export licenses or imposed additional requirements while the review is underway.
Both Synopsys and Cadence have denied receiving such notifications. However, if implemented, these restrictions could have a notable financial impact as China currently accounts for 12% to 14% of their annual revenue.
Despite the uncertainty, Synopsys released strong second-quarter results for fiscal year 2025 and reaffirmed its full-year revenue guidance of approximately $6.8 billion. The company’s management stated that they have received no new communication from the Bureau of Industry and Security (BIS), and their guidance reflects their current understanding of the export landscape.
Synopsys provides end-to-end solutions for silicon-to-systems design, including EDA software, silicon IP, and system verification and validation.
Cadence Design Systems specializes in computational software for semiconductor and systems design, and is a key player in the electronic systems design space.
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