The United States has lifted restrictions on certain chip design software exports to China.

Siemens, Synopsys, and Cadence Design Systems announced the change on July 3.

The three major electronic design automation (EDA) software developers said they received notifications from the US Department of Commerce’s Bureau of Industry and Security about the removal of restrictions imposed in May.

Synopsys stated on its website that the restrictions had been rescinded immediately. Cadence also confirmed the change in an email.

Siemens Digital Industries Software said it reinstated access for Chinese clients.

Both Cadence and Synopsys are working to restore access to their software and technology for clients in China.

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🔗 Source: South China Morning Post

🧠 Food for thought

1️⃣ Export controls create short-term leverage but face economic realities

The rapid reversal of EDA software restrictions demonstrates how economic interdependence often limits the sustainability of tech export controls.

The May 2025 restrictions threatened Cadence’s $550 million annual revenue stream from China, representing 12% of its global sales, while analysts estimated Synopsys could have lost $200-300 million annually from Chinese customers 1.

US and European firms control approximately 80% of China’s EDA market, creating significant mutual dependency that makes long-term restrictions difficult to maintain 1.

This pattern aligns with findings from the Federal Reserve Bank of New York that previous technology export controls cost US companies $130 billion in market capitalization while failing to achieve their strategic objectives 2.

The quick policy reversal, within approximately five weeks, highlights how economic pressures often override geopolitical concerns when core business interests are threatened.

2️⃣ EDA tools represent a critical chokepoint despite their modest market size

Electronic Design Automation software serves as a strategic control point in semiconductor development despite being a relatively small market valued at approximately $10 billion in 2021, just a fraction of the $595 billion semiconductor industry 3.

The top three EDA companies—Cadence, Synopsys, and Mentor Graphics—control roughly 70% of the global market, creating significant concentration risk for countries dependent on these tools 3.

These tools are particularly critical for designing advanced semiconductor nodes (like 5nm and 3nm) essential for AI applications and 5G technologies, with profit margins on EDA licenses typically exceeding 80% 1.

China’s semiconductor industry, valued at $400 billion annually, remains heavily dependent on these foreign design tools despite years of investment in domestic alternatives 1.

The strategic importance of EDA software explains why it became a focal point in tech export controls despite representing a much smaller market than semiconductor manufacturing equipment.

3️⃣ Tech restrictions may accelerate rather than impede technological independence

Export controls have historically pushed targeted countries to intensify domestic technology development, potentially accelerating the very technological independence they aim to prevent.

After previous rounds of US restrictions, China increased its domestic investments in advanced chips and began reducing US market shares in the semiconductor ecosystem 4.

The Federal Reserve Bank report suggests that instead of curbing Chinese innovation, technology restrictions have often driven it by creating urgent incentives to develop alternative suppliers and domestic technologies 2.

China has responded to semiconductor export controls with a comprehensive strategy promoting software independence and enacting laws to counter foreign sanctions, investing heavily in its own semiconductor ecosystem 5.

This pattern suggests that the lifting of EDA restrictions may partially reflect a recognition that short-term technology denial strategies often produce unintended long-term consequences by accelerating technological decoupling.

Recent Siemens developments

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