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Investing.com -- Semiconductor design software company Synopsys (NASDAQ:SNPS) has directed its staff in China to immediately suspend all sales and services in the country and to stop accepting new orders, in response to newly imposed U.S. export controls, Reuters reported on Friday.
The move follows a letter from the U.S. Department of Commerce’s Bureau of Industry and Security, which outlines expanded restrictions that require companies to obtain licenses before supplying certain products to China and revoke previously issued licenses for some suppliers.
The new rules cover key semiconductor-related items, including design software and manufacturing chemicals.
On Thursday, Synopsys also announced it would suspend its annual and quarterly forecasts due to the regulatory changes, the report said.
In an internal message sent to staff in China, Synopsys said its initial interpretation of the new rules indicates a broad ban on selling its products and services in China, effective May 29.
To comply, the company has halted sales, blocked order fulfillment, and suspended new orders until further guidance is provided.
The restrictions impact all customers in China, including employees of international companies operating within the country, as well as any Chinese military-affiliated users globally, the report said.
Additionally, access to Synopsys’s customer support portal, SolvNetPlus, has been disabled for Chinese clients.
This enforcement action has not been publicly disclosed prior to now. Synopsys, alongside Cadence and Siemens (ETR:SIEGn) EDA, holds a dominant position in the global electronic design automation (EDA) software market.
The three companies account for over 70% of China’s EDA market, according to Chinese state media agency Xinhua.
Chinese chip firms such as Brite Semiconductor, Zhuhai Jieli, and VeriSilicon have all previously stated they use Synopsys and Cadence tools. Synopsys has not yet responded to requests for comment, the report added.