Said three persons familiar with the subject, the United States has directed a wide swath of businesses to halt exporting goods to China without a license and canceled licenses already granted to some suppliers.
One of the individuals said the new limitations, which probably increase tensions with Beijing, seem to be aimed at choke spots to stop China from acquiring goods required for important sectors.
Products impacted, according to the persons, design software and chemicals for semiconductors, butane and ethane, machine tools, and aviation equipment.
Over the past few days, the US Department of Commerce has sent letters to many businesses alerting them of the new limits.
Two of the individuals indicated that companies who provide semiconductor electronic design automation (EDA) software were received letters last Friday indicating licenses would now be required to export to Chinese clients.
One claimed among the electronic design automation program developers include Cadence, Synopsys, Siemens EDA.
The two sources claimed the Commerce Department will evaluate licensing requests for shipments to China on a case-by-case basis, implying the measure was not a total ban.
Whether the new limitations fit a larger plan to generate leverage for trade negotiations during a stop in the application of greater tariffs is not known.
While adding “in some cases, Commerce has suspended existing export licenses or imposed additional license requirements while the review is pending,” the Commerce Department stated it is looking at shipments of strategic relevance to China.
The White House did not react right away to a request for remarks.
Cadence, which declined to comment, closed down 10.7%, while Synopsys dropped 9.6%.
“They are the true choke point,” said a former Commerce Department official, who also mentioned that although policies prohibiting the export of EDA tools to China have been under discussion since the first Trump administration, they were shelved as overly extreme.
About 16% of Synopsys’ yearly income comes from China; for Cadence, China represents roughly 12% of annual income.
Synopsys supplies hardware and software for creating sophisticated processors; it works with chip makers including Nvidia, Qualcomm, and Intel.
Earlier, the Financial Times said, the Trump government had directed the software companies to stop providing their goods to Chinese companies.
