US chip designers surge as Commerce Department reverses restrictions on business in China

A couple of US semiconductor-adjacent companies are jumping on Thursday amid thawing on a contentious front in the US-China trade war: advanced technology.

Cadence Design Systems and Synopsys are surging after the Commerce Department told them they no longer need to secure licenses to do business in China.

These two electronic design automation (EDA) firms help chipmakers make chips. Not too many companies specialize in this, so it’s a fairly narrow choke point in the semiconductor supply chain to begin with.

These stocks got slammed in late May after the Financial Times reported that the president had ordered EDA companies to stop selling to Chinese groups.

In separate statements, Synopsys said that it’s “working to restore access to the recently restricted products in China,” while Cadence said it’s “in the process of restoring access to EDA Software and Technology for its affected customers.”