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Shares of Synopsys (SNPS.O) and Cadence Design Systems (CDNS.O) surged in premarket trade on Thursday after the United States lifted export restrictions on chip design software to China, signaling a thaw in trade tensions between the world’s top two economies.
The two companies, along with Germany’s Siemens (SIEGn.DE) said they were resuming access to their electronic design automation (EDA) tools for Chinese customers.
Synopsys and Cadence rose 5.9 per cent and 5.4 per cent respectively in the U.S, and Siemens gained 1.3 per cent in Frankfurt trading.
Together, the three firms control more than 70 per cent of China’s EDA market, according to an April report from state-run Xinhua News Agency.
EDA software is critical for designing semiconductors used in smartphones, cars and computing devices.
The US Commerce Department also moved to withdraw a licensing requirement on ethane exports to China imposed earlier this year.
Both measures were part of a series of tit-for-tat trade restrictions initiated under President Donald Trump’s administration following China’s suspension of rare earth exports in April.