New Tension in US-China Trade War: Trump Issues Strong Order

US President Donald Trump has taken a new step in a bid to limit China’s capacity to manufacture advanced chips. The Trump administration has ordered American companies that develop software used to design semiconductors to stop selling those services to Chinese groups.

According to sources familiar with the matter, the US Department of Commerce has told companies such as Cadence, Synopsys and Siemens EDA, which produce Electronic Design Automation (EDA) software, to end their sales to China. This decision was conveyed in official letters sent by the Bureau of Industry and Security responsible for Export Control within the department. However, it is not yet clear whether all EDA companies have received such letters.

The move is seen as the Trump administration’s latest effort to curb China’s ability to produce AI chips. In April, the U.S. also restricted exports of Nvidia’s AI chips, which it developed specifically for China.

Commerce Ministry officials said exports of strategic importance to China were being reviewed. “In some cases, we have suspended existing export licenses or imposed new license requirements,” one official said.

Although EDA software accounts for a small portion of the total semiconductor industry, it plays a key role in designing and testing next-generation chips. About 80 percent of the Chinese EDA market is controlled by Synopsys, Cadence Design Systems, and Siemens EDA.

In fact, the first restriction in this area was introduced during the Biden administration in 2022. At that time, the sale of the most advanced chip design software to China was banned, but companies continued to sell products that complied with export controls.

*This is not investment advice.

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