White House lifts chip design export ban on China in exchange for rare earth materials compromise — export licences for EDA software sales no longer required

Synopsys
(Image credit: Synopsys)

The U.S. government on Thursday revoked U.S. export curbs that required American companies to obtain licenses to provide chip design software to customers in China, as part of an agreement intended to ease bilateral trade tensions around advanced technologies, reports Bloomberg. In exchange, China will ease export controls on rare earth materials.

The Commerce Department formally informed Cadence Design Systems, Siemens EDA, and Synopsys that they no longer needed government approvals to offer their electronic design automation (EDA) products to Chinese entities. As a result, all three companies can immediately reinstate access to their tools for Chinese chipmakers, which can now continue designing their processors using world-class EDA tools. This is crucially important for companies in China, as design software from Cadence, Siemens, and Synopsys is by far more versatile than tools developed in China.

"On July 2, Synopsys received a letter from the Bureau of Industry and Security of the U.S. Department of Commerce informing Synopsys that the export restrictions related to China, pursuant to a letter received on May 29, 2025, have now been rescinded, effective immediately," a statement by Synopsys reads. "Synopsys is working to restore access to the recently restricted products in China. Synopsys is continuing to assess the impact of export restrictions related to China on its business, operating results and financials."

The U.S. had implemented export restrictions on chip design tools in May in response to China's curbs on exporting certain rare earth materials vital for industrial and defense applications. Under a deal finalized last week, the U.S. committed to allowing sales of chip development software, ethane shipments, and aircraft engines, assuming Beijing honored its pledge to accelerate permits for critical minerals.

As a result of the deal, China secured a significant symbolic victory by getting the U.S. government to include export regulations — something typically considered a security issue rather than a commercial bargaining chip — in the scope of trade negotiations.

When the measures targeting EDA products were introduced in May, it left the chip design software industry puzzled, as there was almost no guidance about which activities remained permissible, which essentially made them stop all of their activities in China. This lack of detail contrasted with the usual extensive consultation process that accompanies such export control actions. Eventually, DoC's economic advisor Kevin Hassett hinted that some semiconductor-related controls might be loosened.

Truth be told, even now it is not completely clear whether the U.S. government has lifted all EDA software export restrictions to China, which includes programs intended to design chips made on 14nm/16nm-class DRAM and logic technologies, or just those that are not restricted by other regulations.

Analyst Ryan Fedasiuk, a former State Department China adviser, noted that EDA software had been among the last foreign technologies still accessible to companies like Huawei, which relies on these tools to design its upcoming processors. Even with market access restored, U.S. firms now face uncertainty that Chinese companies may pursue local alternatives or diversify suppliers to avoid future disruptions.

Follow Tom's Hardware on Google News to get our up-to-date news, analysis, and reviews in your feeds. Make sure to click the Follow button.

Anton Shilov
Contributing Writer

Anton Shilov is a contributing writer at Tom’s Hardware. Over the past couple of decades, he has covered everything from CPUs and GPUs to supercomputers and from modern process technologies and latest fab tools to high-tech industry trends.

  • Pierce2623
    EDA software was all it took to get the rare earths back?!?! Man, that’s a big win.
    Reply
  • A Stoner
    Pierce2623 said:
    EDA software was all it took to get the rare earths back?!?! Man, that’s a big win.
    Until Trump started the trade war we were buying as much of these rare earth's as were available.
    Reply
  • SomeoneElse23
    A Stoner said:
    Until Trump started the trade war we were buying as much of these rare earth's as were available.
    I believe DJT clearly stated the point of tariffs were to equalize trade and stop other countries from abusing the US.

    It's been said DJT is a master negotiator. It appears to be working in this case.
    Reply
  • P.Amini
    Will nVidia hide those 5090 DDs?
    Reply
  • JamesJones44
    A Stoner said:
    were buying as much of these rare earth's as were available

    While seeding technology and manufacturing to a competitor/partner. I'm not a fan of what is going on in general, but something needed to be done about the labor cost imbalance that exists between the two largest trading partners.

    Hopefully this is a sign that the two partners can come to an agreement that actually works for both sides.
    Reply
  • Notton
    SomeoneElse23 said:
    ...tariffs were to equalize trade and stop other countries from abusing the US.
    I'm not accusing you of believing that, but that's not how it works at all.
    USD is the global reserve currency. As in it's the most stable and has the safest vibes. It only achieves that by trading with other countries.

    Being the global reserve currency is a massive benefit. US literally profits every time a transaction is made off of the USD, i.e. surcharges, and dollar value growth. Not only that, it gets to have a say in everyone else's finances.

    What happens when trust is eroded? Well, the smaller scale version is a Bank Run.
    Reply
  • phead128
    Pierce2623 said:
    EDA software was all it took to get the rare earths back?!?! Man, that’s a big win.
    It was a whole set of stuff, from jet engines, visas, etc...., not just EDA.
    Reply
  • SomeoneElse23
    Notton said:
    I'm not accusing you of believing that, but that's not how it works at all.
    USD is the global reserve currency. As in it's the most stable and has the safest vibes. It only achieves that by trading with other countries.

    Being the global reserve currency is a massive benefit. US literally profits every time a transaction is made off of the USD, i.e. surcharges, and dollar value growth. Not only that, it gets to have a say in everyone else's finances.

    What happens when trust is eroded? Well, the smaller scale version is a Bank Run.
    That's a curious perspective.

    Frankly, though, I heard it directly from the Prez's mouth on inauguration day.

    It'd be a strange world for me to believe your words over his.
    Reply
  • blppt
    "Frankly, though, I heard it directly from the Prez's mouth on inauguration day."

    Funny thing is, he also promised not to touch Medicaid. Might not be the most truthful person in the world.
    Reply
  • SomeoneElse23
    blppt said:
    Funny thing is, he also promised not to touch Medicaid. Might not be the most truthful person in the world.
    Reference?

    I don't recall it (which doesn't surprise me, as it doesn't mean anything to me). A quick search doesn't match what you said, and the actual inauguration speech transcript has 0 references to medicaid.

    Regardless, posts in TH forum from random people (myself included) should be taken with a large grain of salt.

    EDIT: Nevermind. I see now you aren't talking about the inauguration speech. I'm open to meaningful discussion about it, but it's not appropriate here. Cheers.
    Reply