Synopsys Forced to Halt China Sales Amid New Trade Restrictions

Deal News | Jun 02, 2025 | EIN

Synopsys, a prominent semiconductor design company, is currently dealing with significant challenges due to new trade restrictions from the U.S. government, which have necessitated the cessation of sales to China. In tandem, the company, alongside Ansys, received the go-ahead from the Federal Trade Commission (FTC) for their $35 billion merger, contingent upon the divestiture of certain assets to mitigate anticompetitive concerns. Assets relating to semiconductor design and photonic light simulation will be transferred to Keysight Technologies to satisfy regulatory bodies. This decision aligns with similar conditions set by European regulators. While facing operational hurdles in China, which makes up 10% of Synopsys's revenue, the merger signals a strategic maneuver to consolidate expertise in design, test, and measurement. Despite these changes, the U.S.-China trade relationship remains tense, impacting Synopsys's engagement in the Chinese market.

Sectors

Semiconductor
Software and Technology
Mergers and Acquisitions

Geography

United States – The U.S. is where trade restrictions originate and where regulatory approval of the merger was granted.
China – The impact of U.S. trade restriction on Synopsys's ability to conduct business there is significant, given China's share in its market.
European Union – European regulators had already stipulated similar divestiture conditions for the Synopsys-Ansys merger as the U.S. FTC.

Industry

Semiconductor – The article primarily involves Synopsys, a company in the semiconductor design sector, underscoring industry challenges from trade restrictions.
Software and Technology – Focuses on electronic design automation tools pivotal in the tech industry, which are being restricted in sales to China.
Mergers and Acquisitions – Discusses a significant industry merger between Synopsys and Ansys, highlighting divestiture conditions for antitrust compliance.

Financials

35 billion – The valuation of the proposed merger deal between Synopsys and Ansys.
10% – Approximate percentage of Synopsys's revenue coming from its operations in China, which are now impacted by U.S. trade restrictions.

Participants

Name	Role	Type	Description
Synopys	Target Company	Company	A semiconductor design company facing U.S. trade restrictions and engaged in a merger with Ansys.
Ansys	Target Company	Company	Partnering with Synopsys in a $35 billion merger conditioned on asset divestment.
Keysight Technologies	Acquirer of Divested Assets	Company	Designated to acquire assets divested by Synopsys and Ansys to satisfy antitrust concerns.
Federal Trade Commission (FTC)	Regulatory Body	Government	U.S. body granting conditional approval to the Synopsys-Ansys merger based on asset divestiture.
U.S. Department of Commerce's Bureau of Industry and Security (BIS)	Regulating Body	Government	Bureau responsible for enforcing new trade restrictions impacting Synopsys's sales to China.