Synopsys has suspended its annual and quarterly financial forecasts after receiving a letter from the Bureau of Industry and Security (BIS) of the US Department of Commerce outlining new export restrictions on goods and services to China.
In a filing with the SEC, the chip design software company said: “In connection with BIS Letter, Synopsys has suspended its financial guidance for the third quarter of fiscal year 2025 and full fiscal year 2025.
“Synopsys is currently assessing the potential impact of the BIS Letter on its business, operating results, and financial condition,” the filing continued.
The Financial Times had reported earlier this week that Synopsys, alongside its competitors Cadence and Siemens, had been informed by the White House that it could no longer sell to customers in China, a claim Synopsys CEO Sassine Ghazi denied during a conference call with analysts on May 28.
The company then received a letter from the BIS informing them of the restrictions on May 29, following the announcement of its Q2 2025 results. For the fiscal quarter ending April 30, the company posted revenue of $1.6 billion, with customers in China accounting for around 10 percent of that figure.
The White House informed Cadence of the restrictions on May 23, the company said its own filing with the SEC, dated May 29.
According to a report from Reuters, in an internal memo to employees, Synopsys said the restrictions came into effect on May 29, 2025, adding that in order to be in compliance with the new restrictions, the company would be halting new orders to China and blocking sales and fulfillment in the region.
DCD has reached out to Synopsys for comment.
Elsewhere this week, the FTC announced it would be requiring Synopsys and Ansys to divest certain assets in order to proceed with their $35bn merger.
Under the proposed consent order, Synopsys will be required to sell its Optical Solutions Group to Keysight in addition to offloading a number of other optics and photonics software offerings, including Code V, LightTools, LucidShape, RSoft, and ImSym.
Meanwhile, Ansys will sell its register-transfer-level power consumption analysis software, PowerArtist.
The conditions appear to mimic the conditions outlined by the European Commission in January of this year when it conditionally approved the deal. In the UK, the Competitions and Market Authority has accepted undertakings in lieu of reference for the anticipated acquisition.
Synopsys confirmed the $35bn cash-and-stock deal to acquire engineering and product design software firm Ansys in January 2024. The two companies have worked together since 2017, with CEO Ghazi saying at the time that the deal represented the “logical next step.”
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