Donald Trump orders US chip software suppliers to stop selling to China

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The Trump administration told the American companies that provide programs used to design semiconductors to stop selling their services to Chinese groups, in the last attempt to make it difficult for China to develop advanced chips.

Many people familiar with this step said that the US Department of Commerce had told the so-called electronic design automation groups-which include rhythm, millions, and Siemens Eda-to stop providing their technology to China.

The Office of Industry and Security, the arm of the US Department of Commerce, which supervises export controls, issued the directing of companies via messages, according to the people. It was not clear whether every American EDA company had received a letter.

This step represents a great new effort by the administration to discourage China’s ability to develop pioneering artificial intelligence chips, as it seeks a technological advantage over its geopolitical competitor. In April, Washington restricts the export of artificial intelligence chips in China in NVIDIA.

In calling the second quarter profit on Wednesday, CEO of Synopsys Sasine Ghazi said: “We are aware of reports and speculation, but Synopsys did not receive a notification from BIS. Therefore, our guidelines that we repeat throughout the year reflect our current understanding of BIS export restrictions, in addition to our expectations throughout the year throughout the year. [revenue]”

An official from the Ministry of Commerce said that “a review of exports of the strategic importance of China. In some cases, [the department] Stop current export licenses or impose additional licensing requirements during suspended review. “

The guidance comes at an accurate time as the United States and China are trying to reach a commercial deal after the two sides recently agreed in Geneva to stop the customs tariff for 90 days.

The Financial Times reported last month that the Trump administration aims to put a number of Chinese chip makers on a black list that would make it very difficult for American companies to provide them with American technology. But some officials prompted the delay to avoid exposing the commercial talks of the two countries.

Christopher Johnson, a former CIA analyst, said that the new export controls emphasized “the fungal fragility to calm the tariff reached in Geneva. Both sides want to keep them and continue to show the ability of their suffocation capabilities, the risks that can be stopped even at the death of 90 days.”

China has successfully benefited from strangling it on the rare ground to bring the United States to the negotiating table in Geneva, which “left the hawks of China in Trump keen to show export control weapons.”

Although it explains a relatively small share of the total semiconductor industry, the EDA program allows chips and manufacturers to develop and test the next generation of chips, making it an important part of the supply chain.

Synopsys, Cadence Design Systems and Siemens Eda – are part of Siemens Digital Industries Software, a subsidiary of Siemens AG in Germany – about 80 percent of the Chinese EDA market. None of the three companies immediately responded to the suspension requests.

In the fiscal year 2024, Synopsys recorded approximately one billion dollars in China’s sales, approximately 16 percent of its revenues. The rhythm said that China represented $ 550 million, or 12 percent of its revenues.

Synopsys shares fell 9.6 percent on Wednesday, while rhythm tools lost 10.7 percent.

Siemens said in a bull statementSToday, customer support in China “for more than 150 years”, and “will continue to work with our world customers to alleviate the impact of these new restrictions during work according to the applicable national export control systems.”

In 2022, the Biden Administration has provided restrictions on sales of the most advanced chips design programs to China, but companies continued to sell products compatible with export monitoring to the country.

In his first term as president, Donald Trump Huawei prevented the Chinese UDA tools. Huawei is seen as an emerging competitor for NVIDIA with AI chips.

Jensen Huang, CEO of NVIDIA recently warned that successive attempts by American administrations to provide the ecosystem in China of artificial intelligence with export controls have failed.

Last year, Synopsys entered an agreement to purchase ansys, an American simulation software, for $ 35 billion. The deal still requires approval from the Chinese organizers. ANSYS shares fell 5.3 percent on Wednesday.

The US Federal Trade Committee announced on Wednesday that the two companies will need to strip specific software tools to receive its approval of the deal.

The export restrictions encouraged Chinese competitors, as three leading EDA companies – Empyrean, Primarius, and Seitronix technology – grows largely in the market in recent years.

The shares of Empyrean, PrimArius and Sementonix increased by more than 10 percent in early trading in China on Thursday.