Synopsys has suspended its financial guidance for the third quarter of FY 2025 and full fiscal year 2025, and has reportedly ordered China staff to halt sales and services, having received a letter from the Bureau of Industry and Security of the U.S. Department of Commerce heralding new export restrictions in China that will impact semiconductor software.
Rumblings of such new restrictions started earlier this week; however, Synopsys denied having received any intimation of the new restrictions as late as May 28. Turns out the letter was still in the post. On May 29, Synopsis issued a statement that reads: "Synopsys, Inc. (Nasdaq: SNPS) has suspended its financial guidance for the third quarter of fiscal year 2025 and full fiscal year 2025."
In a full statement, Synopsys confirmed it has received a letter from the Bureau of Industry and Security of the U.S. Department of Commerce. The letter, received following its Q2 financial announcements on May 29, informed Synopsys of "new export restrictions related to China."
Officially, the company says it is still assessing the impact of the letter on its business. Behind the scenes, Reuters reports things are less calm. According to a new report taken from an internal letter, Synopsys has reportedly told staff in China "to halt services and sales in the country and stop taking new orders" to comply with the restrictions.
The report cites sources who claim the U.S. "Has ordered a broad swathe of companies to stop shipping goods to China without a license and revoked licenses already granted to certain suppliers," including design software and chemicals for semiconductors.
Synopsys is a leading global supplier of electronic design automation software for the design and manufacturing of semiconductors and partners with the industry giants TSMC, Intel Foundry, Arm, and more.
Synopsys reportedly told staff in its letter that, based on its initial interpretation, the new restrictions "broadly prohibit the sales of our products and services in China," effective immediately. It has blocked sales and fulfillment in the country and is halting new orders until it receives further clarification.
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