As trade war truce with China holds, US lifts curbs for chip design software and ethane

NEW YORK: The United States has lifted restrictions on exports to China for chip design software developers and ethane producers, a further sign of de-escalating U.S.-Sino trade tensions including concessions from Beijing over rare earths.

Synopsys SNPS.O, Cadence Design Systems CDNS.O and Siemens SIEGn.DE, three of the world's largest electronic design automation (EDA) software developers, said on Wednesday they are restoring access to their software and technology for customers in China.

Earlier in the day, the U.S. also sent letters to ethane producers to rescind a restrictive licensing requirement on exports to China imposed in late May and June.

The restrictions on EDA software developers and ethane producers were just some of many countermeasures imposed by U.S. President Donald Trump's administration in response to China's export suspension of rare earths and related magnets in April.

Beijing's move on rare earths, part of retaliation against Trump's earlier tariffs this year, has upended supply chains central to automakers, aerospace manufacturers, semiconductor companies and military contractors. The issue threatened to scupper a bilateral trade deal.

On Friday, China's commerce ministry said that following talks with the U.S., the two sides have confirmed a framework under which China will review export applications for controlled items while the U.S. will cancel corresponding restrictive measures.

"The U.S. have escalated to de-escalate. They put restrictions on many more items in order to get the Chinese to back off on rare earths," according to a source familiar with discussions inside the U.S. government.

"As the U.S. and China continue to hold to this framework agreement, we're gonna see a lot of these restrictions go away. Going back to a status quo, where we were at in Feb/March," said the source who was not authorised to speak to media and declined to be identified.

EDA RELIEF

Siemens said in a statement that it has resumed sales and support for Chinese customers after it was recently notified by the U.S. Department of Commerce that export control restrictions for customers in China were no longer in place.

Its shares rose 1.7% after market open on Thursday.

Synopsys expects to complete system updates to restore access and support to Chinese customers within three business days, according to a company letter to staff seen by Reuters.

The U.S. Department of Commerce did not immediately respond to Reuters' requests for comment.

Long-term restrictions on Chinese access to EDA software would have significantly hampered China's chip design industry. Synopsys, Cadence and Siemens command more than 70% of China's EDA market, Chinese state news agency Xinhua reported in April.

It was not immediately clear if other countermeasures imposed by the U.S. have been lifted. These include the suspension of licenses for GE Aerospace to ship jet engines for the C919 aircraft of Chinese airplane maker COMAC CMAFC.UL and for nuclear equipment suppliers to sell to Chinese power plants.