China revenue at risk as US curbs slam EDA giants -- Cadence, Synopsys, Siemens

Rumors swirled last week that the U.S. is tightening controls on China’s chip ambitions. According to IC Smart and Reuters, the top three EDA giants—Synopsys, Cadence, and Siemens—were told to halt software sales to China without a license. Though initially silent, all three have now confirmed receiving a notice from the U.S. Commerce Department, casting fresh uncertainty over their China business.

The global EDA market is ruled by U.S. and European giants. TrendForce reports in 2024, Synopsys, Cadence, and Siemens hold 31%, 30%, and 13% market shares respectively. But, new U.S. export controls threaten their China revenue, which makes up over 10% of their total sales, according to EE Times.

EE Times suggests that the new directive expands earlier rules, forcing major EDA players to get licenses for all China sales, reviewed case by case. Previously, restrictions mostly targeted software for cutting-edge chips like sub-14nm and GAA-FET designs, the report notes.

Synopsys revenue in China at risk
According to Synopsys’ financial report, Synopsys pulled in $989.5 million from China in FY2024—about 16% of its total revenue. The impact of the latest curbs seems to be impossible to overlook. As per Reuters, just a day after releasing its forecasts, the company abruptly pulled them, as fresh U.S. export curbs on China threw its chip design software sales into question.

As revealed by Reuters, in an internal memo to staff in China, Synopsys said the new U.S. export rules “broadly prohibit” selling its products and services in the country, effective May 29. To comply, it’s suspending all sales, shipments, and new orders in China until further notice.

Synopsys formerly expected its current quarter sales to grow by 10–12% to between $1.76 and $1.79 billion, as noted by Reuters.

Cadence, Siemens also take a hit
Meanwhile, according to Cadence’s earnings report, in fiscal 2024, the company pulled in $550 million from China, making up 12% of its total revenue.

EE Times notes that prior to this, Cadence’s China revenue dropped by over $100 million from 2023 to 2024. For fiscal 2025, the company reportedly expects flat growth in China, citing ongoing trade restriction uncertainties.

On the other hand, 36Kr reports Siemens EDA holds a strong grip on China’s market. Its Calibre tools, making up 40% of revenue, are vital for chip design sign-off—used by over 90% of IC designers and owning 70%+ of the market. Cutting off Calibre would seriously hit China’s chip industry, the report notes.

As per EE Times, Siemens confirmed that on May 23, the U.S. notified the Electronic Design Automation industry of new export controls on EDA software sales to China and Chinese military users worldwide. The company emphasized its 150 years of support in China and pledged to help customers comply while minimizing the impact, according to the report.

China’s EDA challenges mounting
EE Times highlights that the EDA crackdown zeroes in on its key role in crafting advanced chips at 7nm, 5nm, 3nm, and beyond—where complexity demands top-tier tools. These new restrictions, therefore, aim to stop China from building its own high-end semiconductors critical for AI, supercomputing, and military tech.

According to Commercial Times citing Siemens, first-time chip tape-out success rates have fallen to a historic low of 14%, down from 24% two years ago. In other words, eight out of ten chip designers now fail on their initial attempt. Can China overcome this challenge without strong EDA support, as domestic players push their limits?

As highlighted by Commercial Times, China has homegrown EDA firms like Empyrean, Primarius, and Semitronix, but they still fall short—especially in advanced GAA tools. On the other hand, EE Times notes that the U.S. has also taken direct aim at Chinese EDA firms, adding Empyrean Technology to the Entity List in December 2024—potentially cutting off its access to key technologies and components.

-- Source: TrendForce, Taiwan.