Synopsys has instructed its staff in China to cease sales and services within the country, as well as to halt accepting new orders. The US-based semiconductor design software firm took the step to adhere to recent US export restrictions, according to an internal letter seen by Reuters. The restrictions are part of a broader US directive that requires numerous companies to refrain from shipping goods to China without a licence.
The US administration has also rescinded previously granted licences for certain suppliers. These restrictions impact a range of products, including design software and chemicals vital for semiconductor production.
Synopsys blocked sales until further clarity on regulations
In the internal communication sent to its China-based staff, Synopsys stated that the new restrictions, which became effective on 29 May 2025, broadly prohibit the sale of its products and services in China. The company is currently blocking sales and fulfilment in China while it seeks further clarification on the regulations.
The measures impact all customers in China, including employees of global customers stationed in the country and Chinese military users, regardless of their location. Synopsys has also disabled access for Chinese customers to its customer support portal, SolvNetPlus. The company has not publicly commented on these developments.
Synopsys, along with Cadence and Siemens EDA, is one of the top three companies in the electronic design automation (EDA) software sector. EDA tools are crucial for chipmakers in designing semiconductors used in various technologies, including smartphones, computers, and automobiles.
According to the Reuters report, the restriction poses a significant challenge as many Chinese chip design customers depend heavily on advanced US software. In April, a report by the Chinese state news agency Xinhua stated that Synopsys, Cadence, and Siemens’s Mentor Graphics collectively hold over 70% of China’s EDA market.
AI chip investments propel Synopsys’ revenue forecasts
Last week, Synopsys reported results for its second quarter of fiscal year 2025. The company’s revenue totalled $1.604bn in Q2 of FY2025, up from $1.455bn registered in the same period a year ago. In the third quarter of fiscal year 2025, Synopsys expects to earn between $1.75bn and $1.78bn. The forecast is driven by heightened demand for its semiconductor design software, spurred by a worldwide rise in AI chip investments.
Recently, Synopsys also received conditional approval from the US Federal Trade Commission (FTC) for its acquisition of 3D design software firm Ansys. The $35bn transaction, announced in January 2024, faced scrutiny from various antitrust authorities, including the UK’s Competition and Markets Authority (CMA) and the FTC.
The FTC’s approval requires Synopsys and Ansys to divest certain assets to address antitrust concerns. Synopsys will divest its optical and photonic software tools, while Ansys will divest a power consumption analysis tool, PowerArtist. Both companies will transfer these assets to Keysight Technologies.
Read more: AI chip demand drives Synopsys’ Q3 revenue forecast beyond expectations
