According to reports from the Financial Times, the Trump administration has demanded American semiconductor design software companies stop providing services to Chinese clients, a move seen as a significant step in countering geopolitical competitors.

The US Department of Commerce has instructed Electronic Design Automation (EDA) companies, including Cadence, Synopsys, and Siemens EDA, to cease providing technical services to Chinese customers. The requirement was conveyed through a letter, but it is unclear whether all US EDA companies have received notification.

EDA software is crucial for designers and manufacturers, aiding in the design and testing of next-generation chips prior to production. Although the EDA industry represents only 1.6% of the global $600 billion semiconductor market, it is a critical component of the latest chip supply chains.

The CEO of Synopsys remarked that they have yet to receive formal notification, and their financial outlook will be based on the current understanding of export control regulations. This move is regarded as an effort to maintain technological superiority over China's advancements.

The timing of this ban coincides with ongoing US-China trade negotiations, raising concerns about its potential impact on China's semiconductor industry.