Shares of United States chip design giants Synopsys and Cadence Design Systems surged on Thursday after the U.S. government lifted recent export restrictions on advanced semiconductor software to China, providing relief to the Electronic Design Automation industry and easing tensions in the ongoing tech trade dispute.
Synopsys shares rose 6.7% in pre-market trading, while Cadence gained 5.9%. Germany’s Siemens, another major EDA player, also climbed 0.9% on the Frankfurt exchange.
The companies announced they had resumed the availability of their EDA tools for Chinese customers following the policy shift. The U.S. export controls, introduced in late May, had raised concerns over access to the crucial Chinese market, which accounts for a significant share of their revenues. Cadence generates roughly 12% of its annual sales from China, while Synopsys derives about 16%.
“This marks a distinct warming of relations and a small ceasefire in the chips war,” said Susannah Streeter, head of money and markets at Hargreaves Lansdown.
The rollback comes as Washington navigates the complex geopolitical balance between safeguarding national security and supporting U.S. tech firms’ global operations. For years, U.S. administrations have sought to restrict China’s access to advanced technologies, particularly in artificial intelligence and semiconductor development.
The temporary restrictions had prompted Synopsys to suspend its annual and quarterly earnings outlook just one day after issuing it in May. The company has yet to confirm whether it will reinstate those forecasts following the policy reversal.
Analysts at Mizuho noted the restrictions were likely to affect only about a month’s worth of revenue for both Synopsys and Cadence in the current quarter.
The development could also remove a major hurdle for Synopsys’ pending $35 billion acquisition of engineering software firm Ansys. The deal, previously facing potential delays or regulatory pushback from China due to the export curbs, is now expected to proceed. Mizuho analysts believe the merger could close by the July 15 deadline or continue making progress toward completion in 2025.
