US rolls back EDA export curbs—opening the door for Synopsys (SNPS) and Cadence (CDNS)

The U.S. Commerce Department has rescinded the licence letters it sent in late May that forced America’s three big electronic-design-automation vendors—Synopsys, Cadence Design Systems and Siemens EDA—to halt most sales and support for Chinese chip designers. The companies say the notice arrived on 2 July and takes effect immediately. Synopsys told staff it expects to finish re-enabling Chinese customer accounts within three business days, while Siemens and Cadence also confirmed that service has already resumed for mainland clients.

The step is the first concrete deliverable from last week’s Washington-Beijing “framework deal,” under which China agreed to restore rare-earth exports and accelerate licence reviews for U.S. firms in exchange for a phased rollback of new U.S. controls. A U.S. official familiar with the talks described the May EDA curbs as “shock leverage” meant to bring Beijing back to the table; with that goal achieved, the letters were deemed unnecessary and withdrawn.

For the software makers, China represents a mid-teens share of revenue, and the five-week disruption threatened to dent September-quarter results. Analysts now expect a catch-up effect as deferred renewals are booked in the current quarter and note that domestic Chinese EDA alternatives remain at least one technology generation behind U.S. offerings.

With the China overhang lifted, both stocks look positioned for renewed multiple expansion. The structural drivers—rising chip complexity and new AI-assisted design tiers—remain intact, and the abrupt policy reversal removes the biggest near-term risk to their growth narratives. For investors able to stomach normal semiconductor-cycle volatility, Cadence and Synopsys are now clear buys again.