The US has lifted export restrictions on semiconductor design software to China, reversing a controversial policy imposed just six weeks ago that had threatened to cripple China’s chip design capabilities.
The three leading semiconductor design software providers, Synopsys, Cadence Design Systems, and Germany’s Siemens, announced they had been notified that export license requirements for business in China are no longer in place.
“On July 2, Synopsys received a letter from the Bureau of Industry and Security of the U.S. Department of Commerce informing Synopsys that the export restrictions related to China, pursuant to a letter received on May 29, 2025, have now been rescinded, effective immediately,” Synopsys said in a statement. “Synopsys is working to restore access to the recently restricted products in China.”
“Siemens was recently notified by the Bureau of Industry and Security, U.S. Department of Commerce, that the export control restrictions on Electronic Design Automation (EDA) software and technology to customers in China set forth in the May 23rd letter received by Siemens are no longer in place,” Siemens said in a separate statement.
“As a result, Siemens has restored full access to software and technology classified under Export Control Classification Numbers (ECCNs) 3D991 and 3E991, subject to applicable export control laws and regulations, and we have resumed sales and support to Chinese customers,” the company added.
According to CNN, the lifting of restrictions comes as China agreed to allow and speed up the flow of rare earths under its current licensing regimes, while the US agreed to lift related “countermeasures,” including export controls on chip software, ethane and jet engines.
The reversal marks a dramatic shift from the aggressive stance the Trump administration took in May, when it imposed sweeping restrictions on electronic design automation (EDA) software — the critical tools needed to design advanced semiconductors.
A short-lived stoppage
The restrictions had targeted what analysts called the “upstream” of chip production — the fundamental design phase rather than manufacturing.
The May restrictions represented a strategic escalation in the US-China tech war, moving beyond controls on actual semiconductors to target the software tools essential for designing them. As experts noted at the time, this approach was potentially more damaging because EDA software cannot be easily substituted and forms the foundation of all chip design and manufacturing.
“EDA tools cannot be substituted and are the foundation to chip design and manufacturing,” said Neil Shah, VP for research and partner at Counterpoint Research, commenting on the original restrictions. “The software lifecycle of these tools is super important with updates, patches and support to be at the forefront of leading edge, which will stop with the restrictions on licensing.”
The financial implications were substantial, with Synopsys and Cadence earning annual revenue of about 16% and 12% from their China business respectively. The restrictions forced these companies to halt support and updates to Chinese customers, creating immediate disruptions in China’s semiconductor design ecosystem.
Tensions remain
For the semiconductor design industry, the news brings immediate relief from what had threatened to become a major business disruption. “For more than 175 years Siemens has supported customers globally including China and the United States. We appreciate the patience of our customers as we have navigated the rapidly changing global trade landscape and understand the inconvenience this may have caused,” Siemens noted in its statement.
However, the episode highlights the vulnerability of global technology supply chains to geopolitical tensions. The brief but intense disruption demonstrated how quickly essential software tools can become weapons in trade disputes, while the underlying strategic competition between the US and China over semiconductor technology remains unresolved.
The rapid reversal of the EDA software restrictions suggests both sides recognized the mutual economic damage such controls could inflict. However, the latest deal did not appear to address the still-high tariffs both countries imposed on each other, and the truce is set to expire in August.
Source:: Network World