The U.S. Department of Commerce has lifted the export restrictions on chip design technology destined for China, according to company disclosures released Wednesday evening. This development is part of ongoing trade negotiations between Washington and Beijing.
Following the announcement, shares of leading chip design firms Synopsys Inc (NASDAQ:SNPS) and Cadence Design Systems Inc (NASDAQ:CDNS) saw notable gains. Synopsys stock climbed approximately 6% to $555.00, while Cadence shares rose around 5.1% to $326.99, based on Robinhood’s 24-hour trading data.
Synopsys confirmed in a statement that it received official notification from the Commerce Department that export limitations imposed in late May had been revoked effective immediately. The company is actively working to regain access to the products that had been restricted in the Chinese market.
Similar statements were reportedly issued by Siemens AG and Cadence Design Systems, though attempts to reach representatives outside business hours were unsuccessful. The Commerce Department did not immediately respond to requests for comment.
Synopsys, Cadence, and Siemens represent the top three global suppliers of chip design tools and had been informed last May that licenses would be required for exporting software and related materials to China. The removal of these restrictions signals progress in the trade talks following the announcement of a tentative framework agreement in June.
China has also recently indicated advancements toward easing tensions with the U.S. over trade, highlighting technology export controls as a critical issue. Despite this, it remains uncertain whether the regulatory change on Wednesday will lead to a broader relaxation of chip export controls.
Notably, companies such as Nvidia continue to face stringent limits on their sales of advanced AI chips to China. Nvidia’s CEO, Jensen Huang, publicly criticized these controls earlier this year, describing them as counterproductive.
The Biden administration initially imposed tougher export controls in 2022 to restrict China’s access to cutting-edge AI technologies, and these measures were further tightened during the Trump administration’s term earlier this year.
Industry analysts at Mizuho have reacted positively to the latest easing of restrictions, stating it alleviates a major concern related to China. They now anticipate only a short-term impact—about one month—on Synopsys and Cadence’s revenue for the current quarter.
Additionally, the Commerce Department’s decision supports Mizuho’s expectation that Synopsys’ $35 billion acquisition of engineering simulation firm Ansys (NASDAQ: ANSS) is on track to close by the mid-July deadline or at least move significantly toward completion in 2025. The merger is currently under review by Chinese regulatory authorities, with reports suggesting Beijing’s approval process is progressing well.