Electronic design automation (EDA) giant Synopsys is being probed for allegedly supplying its products to blacklisted Chinese companies.
According to a report from Bloomberg, the U.S. Department of Commerce is looking into the allegations. The allegations are that Synopsys may have provided EDA tools to Huawei’s HiSilicon unit that makes chips at Semiconductor Manufacturing International Corp. (SMIC).
The tools were allegedly suppled through affiliates in China, though it is unclear which tools were provided to HiSilicon and SMIC.
Synopsys has denied any wrongdoing.
"Due to the nature of our business and technology, governmental authorities may inquire into transactions between us and certain foreign entities," Synopsys wrote in a filing with the U.S. Security and Exchange Commission. "For example, we recently received an administrative subpoena from BIS [U.S. Bureau of Industry and Security] requesting 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."
Huawei, as well as its affiliates, was added to the BIS Entity List under the Trump Administration in 2019, effectively blacklisting the company from working with U.S.-based firms unless they were given a special permit.
The move makes it difficult for the Chinese networking equipment and smartphone giant to conduct business with U.S. companies. While on the surface the move was done to protect the emerging 5G network in the U.S., it will also make it extremely difficult for U.S. tech firms to do business with Huawei as well.
In October of 2020, SMIC was added to the BIS Entity List by the Trump Administration, which would restrict use of its components by U.S. firms as well as restrict products sold to the semiconductor manufacturer.