Synopsys, a leading semiconductor design software company, has withdrawn its full-year financial guidance following new export restrictions imposed by the U.S. Commerce Department on sales to China. This development led to a nearly 3% decline in the company’s stock price.
CEO Sassine Ghazi disclosed that the White House directed Synopsys and its competitors, including Cadence Design Systems and Ansys, to halt sales to customers in China. The company received an official letter formalizing these new restrictions and is currently evaluating their impact on its business operations, financial results, and overall condition.
During a recent earnings call, Ghazi noted a deceleration in growth within China during the quarter ending April 30, where approximately 10% of Synopsys’ $1.6 billion quarterly revenue originated from Chinese customers. The company has faced increasing challenges in China, as government policies favor domestic competitors while investing in local chip design capabilities.
Ghazi emphasized that the cumulative effect of prior export restrictions combined with broader macroeconomic conditions in China has resulted in consistent deceleration in that market, a trend expected to continue throughout the fiscal year ending October 2025.
Synopsys has stated: "We are actively assessing the potential impact of the Bureau of Industry and Security (BIS) letter on our business, operating results, and financial health."
The semiconductor design industry’s exposure to China and ongoing geopolitical tensions continue to pose significant operational and financial risks to companies like Synopsys.
