Synopsys probed for any illegal transaction with Huawei, SMIC • The Register

Synopsys is under investigation by the US government over concerns the company flouted restrictions on the flow of US chipmaking technology to some Chinese companies.

US companies like Synopsys must obtain explicit permission from Uncle Sam before doing business with organizations on the Commerce Department’s Entity List.

Investigators are reportedly probing Silicon Valley-based Synopsys, a leading maker of chip design and simulation software, to see if it broke that rule.

Specifically, Synopsys is suspected of working with Huawei hardware subsidiary HiSilicon and chip foundry SMIC behind Uncle Sam’s back, Bloomberg reported this week. We are told that Synopsys may have, through Chinese partners, handed over software tools and chip designs to HiSilicon to produce semiconductor parts at SMIC factories against the wishes of the US government.

HiSilicon and SMIC were placed on the Entity List in 2019 and 2020, respectively, for national security reasons.

In a public filing to the US financial watchdog, the SEC, for its fiscal year through October 2021, Synopsys revealed that it had been subpoenaed by the Office of Industry and Security ( BIS) of the Department of Commerce and that it had been asked to disclose details of trade agreements with the Middle East. Kingdom operations.

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“Due to the nature of our business and our technology, government authorities may investigate transactions between us and certain foreign entities,” Synopsys filed with the SEC. [PDF] declared.

“For example, we recently received an administrative subpoena from the BIS requesting the production of information relating to transactions with certain Chinese entities.

“We believe we are in full compliance with all applicable regulations and are currently working with BIS to respond to its subpoena. However, investigations, such as this, are subject to a number of uncertainties, and we cannot not predict the outcome of this investigation or its potential effect on our operations or financial condition.”

A company spokesperson told us that Synopsys was subpoenaed in November. “A number of companies have received similar requests and that’s not surprising given the current environment,” the spokesperson said. The register in a statement Thursday.

A number of companies have received similar requests and it is not surprising given the current environment

Although Synopsys’ SEC filing was filed and released in December, media coverage this week of the subpoena and its connection to Huawei and the Entity List caused the company’s share price to plummet by 3. .90% at the time of writing.

Semiconductors are more nationally and economically important to the United States than ever before. The global electronics component supply chain has been stifled by repeated factory shutdowns around the world, thanks to the COVID-19 pandemic and natural disasters, prompting the private and public sectors to expand manufacturing of fleas on American soil. This expansion could reduce America’s dependence on foreign suppliers and allow products to be shipped again.

The Biden administration hopes that $52 billion in public funding can be released this year by Congress and injected into domestic chip research and manufacturing to achieve these manufacturing independence goals.

Officials warned that U.S. competitiveness in semiconductor manufacturing had plummeted due to “decades of divestment from domestic semiconductor manufacturing capability.” In 1990, the United States held 40% of the global chip manufacturing market, but that fell to just 12% in 2020 when foundries closed and had to rely on overseas operations.

The register asked the BIS for comment. ®

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