Synopsys Halts China Sales After US Cracks Down On Chip Design Exports

Synopsys, Inc (NASDAQ:SNPS) ordered its China employees to halt services and sales in the country effective May 29, 2025, after the new U.S. export restrictions kicked in, Reuters reported on Friday, citing an internal letter.

Products affected include semiconductor design software and chemicals.

This week, the U.S. ordered several companies to stop shipping goods to China without a license, and licenses, which had already been granted to specific suppliers, were revoked.

On Thursday, the company disclosed that it received a letter from the Bureau of Industry and Security of the U.S. Department of Commerce informing Synopsys of new export restrictions related to China and is ascertaining the potential impact. As a result, it suspended its third quarter outlook (Revenue $1.75 billion–$1.78 billion, Adj EPS $3.82-$3.87).

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The U.S. sanctions prompted Chinese companies, including Alibaba Group Holding (NYSE:BABA), to turn to China-made AI chips as U.S. export curbs cut Nvidia Corp (NASDAQ:NVDA) supply.

Synopsys, Cadence Design Systems, Inc (NASDAQ:CDNS), and Siemens’ Mentor Graphics control over 70% of China’s electronic design automation (EDA) software market, which chipmakers can use to design semiconductors ranging from smartphones to computers and cars.

Synopsys stock lost over 19% in the last 12 months.

On Wednesday, Synopsys reported second-quarter revenue of $1.60 billion, which aligns with the consensus estimate. The adjusted EPS of $3.67 beat the street view of $3.38.

Price Action: SNPS shares are trading higher by 1.50% to $461.82 at last check Friday.

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