U.S. export controls + semiconductor tax incentives

Washington is no stranger to influencing the chip industry through policy, and two recent moves are now impacting the global market.

At the same time as EDA tool restrictions on Chinese firms have been lifted, the U.S. government is also increasing tax incentives for domestic semiconductor investment.  

Though unrelated, both changes demand a swift response from supply chain and procurement leaders. As regulators continue to sway between constraints and incentives, the ability to anticipate and respond to policy shifts has become a necessity. Sourceability helps bridge the gap between sourcing data and regulatory intelligence, enabling stakeholders to act decisively and maintain supply chain resilience.  

Lifting of U.S. export restrictions on EDA tools in China

Despite a tense global trade environment, two firms have found reprieve. Both Synopsys and Siemens have confirmed that the U.S. Department of Commerce has rescinded export restrictions previously placed on electronic design automation (EDA) tools and software headed to China. The change, initially communicated on May 29, 2025, is effective immediately as of July 2, 2025.  

Synopsys confirmed it is restoring access to its previously restricted tools in China as it evaluates the ongoing impact on its finances and operations. Siemens also reinstated full access to EDA software and technology classified under ECCNs 3D991 and 3E991 for its customers in China as of July 3, 2025.  

The surprising reversal marks a significant shift in U.S. semiconductor export policy and offers temporary relief for a supply chain under strain. While both companies emphasized their continued compliance with all U.S. export rules, the broader message to the industry is that these tools are indispensable. Even temporary restrictions can create damaging ripple effects across global chip development timelines.  

For Chinese chipmakers, the restrictions threatened to stall progress by cutting off critical software updates and technical support. On the second level, vendors experienced uncertainty not only around revenue projection but also long-term support contracts and regional partnerships.  

Notably, this change of posture shouldn’t be mistaken for a wider rollback of export controls. High-performance computing components, advanced lithography machines, and GPU shipments to China remain tightly restricted. The selective decision to rescind controls on EDA technology is a tactical shift, not a retreat.  

For companies operating in markets affected by export rules, Sourceability’s Datalynq platform flags risk-prone components or suppliers and suggests alternative sourcing paths. By using it, procurement teams can preserve continuity, retain uninterrupted access to EDA tools, and mitigate compliance risks, even as regulations change.  

New semiconductor investment tax credits boost domestic manufacturing

The U.S. semiconductor industry received a major jolt of momentum on July 4, 2025, with the signing of what lawmakers are informally calling the “Big Beautiful Bill.” Part of President Trump’s flagship legislation in his second term is a sweeping expansion of the previous 25% investment tax credit for domestic chip production.  

Under the new law, the credit increases to a lofty 35% for qualified semiconductor fab projects that begin construction before the end of 2026. The move gives chipmakers renewed incentive and urgency to invest in American onshoring ambitions.  

What began as a Senate proposal to incrementally raise the credit to 30% was ultimately doubled through bipartisan negotiations into an aggressive bid that outpaces global competitors. The 10-point increase sends a powerful message to chipmakers and investors alike that the U.S. is serious about anchoring critical manufacturing capacity on its soil. Chip companies that move fast will be rewarded, but hesitation could end up being costly as the incentives are time limited.

For U.S. chip ambitions, the timing could not be better. Under the Biden administration, the CHIPS Act laid the groundwork for U.S. reshoring efforts. However, many fab projects have moved slower than expected, hindered by permitting delays, labor shortages, and changes to fund disbursement. Over the past few years, it has become clear that funding alone can’t solve all the problems.  

Building resilient U.S.-based supply chains requires thoughtful coordination across materials sourcing, lead time management, and skilled labor development. While federal dollars can make ground-up construction more attractive, those projects will still be exposed to complex challenges on multiple levels.  

Even so, by increasing the investment credit, lawmakers are attempting to accelerate timelines and shift risk calculations in favor of immediate action. For leading industry players like TSMC, Intel, Micron, Nvidia, AMD, and Broadcom—many of whom have already announced multi-billion-dollar U.S. investments—the new credit makes the business case for expanding domestic fabs that much more appealing.