 "Semiconductor showdown: Trump blocks key US tech firms from serving China")
The US government has ordered tech companies to stop offering software designs used to manufacture semiconductors to China as the Trump administration ramps up its efforts to slow down Beijing’s advanced chip production.
Media reports say that the Department of Commerce sent out letters to leading providers of electronic design automation (EDA), including companies like Synopsys and Siemens EDA, last month, asking them to stop the supply of the technology to China.
“The Commerce Department is reviewing exports of strategic significance to China. In some cases, Commerce has suspended existing export licenses or imposed additional license requirements while the review is pending,” a source told Bloomberg.
The scope of the restrictions remains uncertain, but one source indicated they could amount to a de facto ban on conducting business in China. Synopsys derives approximately 16 per cent of its revenue from the Chinese market, while Cadence earns around 12 per cent from the region.
Synopsys chief executive Sassine Ghazi said, “We are aware of the reporting and speculation, but Synopsys has not received a notice from BIS. So, our guidance that we are reiterating for the full year reflects our current understanding of BIS export restrictions, as well as our expectations for a year-over-year decline in China [revenue].”
At the same time, Cadence’s shares dropped 10.7 per cent and Synopsys’s 9.6 per cent after the news.
How else has US curbed Chinese chip production
Earlier this month, US President Donald Trump’s administration warned that any company using Huawei-made artificial intelligence chips anywhere in the world could attract criminal penalties for potentially violating US export controls.
Washington has adopted a steadily intensifying strategy to hinder Beijing’s efforts to develop a domestic semiconductor industry. It began by restricting China’s access to equipment needed for producing cutting-edge electronic components and has since progressively expanded the scope of these regulations.
Impact Shorts
View AllA report by FT says that the Trump administration plans to a number of Chinese chipmakers on blacklist to make it more difficult for US companies to provide them with American technologies.
US-China trade deal
A US federal court blocked most of Donald Trump’s sweeping tariffs from going into effect, boosting markets on Thursday even as the White House appealed against the decision by “unelected judges”.
The opinion marks a significant setback to Trump as he bids to redraw the US trading relationship with the world by forcing governments to the negotiating table through tough new tariffs.
Trump unveiled sweeping import duties on most trading partners on April 2, at a baseline 10 per cent, plus steeper levies on dozens of economies, including China and the European Union.
With inputs from agencies
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