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US Lifts Chip Software Export Restrictions to China, Easing Trade Tensions
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In a move that could de-escalate trade tensions, the United States government has officially revoked export restrictions on chip design software to China. semiconductor software giants Siemens AG, Synopsys, and Cadence independently announced the receipt of letters from the US Department of Trade confirming the revocation on Thursday, July 3, 2025.
Chip Software Export Restrictions Reversed
The decision reverses a previous policy implemented on May 23,2025,which required companies to obtain a license before exporting chip design software to China. This earlier restriction was part of a broader effort to control the export of advanced semiconductor technology, including bans on exporting AI-made chips from companies like Nvidia and AMD.
Did You Know? The global semiconductor market is projected to reach $1 trillion by 2030, driven by demand for AI, 5G, and automotive applications, according to McKinsey & Company.
The reversal comes as China has demonstrated a willingness to resume cooperation on advanced technology and rare earth materials, signaling a potential ceasefire in the ongoing trade disputes. This policy shift is viewed as a positive step towards normalizing trade relations between the two nations.
Market Responds Positively
The market reacted favorably to the news. shares of Synopsys and Cadence surged by over 6% and 7%,respectively,in overnight trading on the robinhood platform. These companies, along with Siemens, are key players in the Electronic Design Automation (EDA) market, which encompasses software, hardware, and services crucial for designing chips and other semiconductor components.
Pro Tip: Investors frequently enough monitor semiconductor equipment stocks as leading indicators of future chip production and overall industry health.
Synopsys CEO Sassine Ghazi had previously reported a slowdown in the Chinese market during the second fiscal quarter, which ended april 30, 2025. At that time, Chinese customers accounted for approximately 10% of Synopsys’ total quarterly revenue of $1.6 billion USD.
According to TrendForce, Synopsis, Cadence, and Siemens Eda held global market shares of 31%, 30%, and 13% respectively, in 2024.
| Company | Market Share (2024) |
|---|---|
| Synopsis | 31% |
| Cadence | 30% |
| Siemens Eda | 13% |
China’s Push for Self-reliance
China has been aggressively pursuing policies to strengthen its domestic chip design software sector, aiming to develop autonomous chip design capabilities. this initiative reflects a broader strategy to reduce reliance on foreign technology and enhance its technological self-sufficiency.
While the lifting of export restrictions is a welcome development, observers caution that future policy decisions will likely depend on the evolving political and security dynamics between the US and China.
What impact will this policy change have on the global semiconductor supply chain? How will China’s domestic chip industry respond to this shift in US policy?
The Broader Context of US-China Trade Relations
The relationship between the United States and China has been marked by increasing trade tensions in recent years, particularly in the technology sector. Concerns over intellectual property, trade imbalances, and national security have fueled these disputes. Export controls on advanced technologies,including semiconductors and related software,have been