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Investing.com -- In a new move to hinder China’s development of advanced semiconductor chips, the Trump administration has reportedly instructed U.S. companies that provide software used in semiconductor design to cease sales to Chinese entities, according to a report by the Financial Times on Wednesday. The directive was issued by the Bureau of Industry and Security, a division of the U.S. commerce department that supervises export controls.
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The companies affected by this directive include Electronic Design Automation (EDA) groups such as Cadence, Synopsys (NASDAQ:SNPS), and Siemens (ETR:SIEGn) EDA. It remains uncertain if all U.S. EDA companies received this instruction.
An official is said to have confirmed that the commerce department is currently evaluating exports of strategic importance to China. During this review, some existing export licenses have been suspended or additional license requirements have been imposed, the official reportedly added.
EDA software, while only comprising a small portion of the overall semiconductor industry, plays a vital role in the supply chain, enabling chip designers and manufacturers to develop and test next-generation chips.
The three companies, Synopsys, Cadence Design (NASDAQ:CDNS) Systems, and Siemens EDA, collectively represent approximately 80% of China’s EDA market.
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