China's State Administration for Market Regulation (SAMR) has conditionally approved Synopsys' $35 billion acquisition of Ansys, marking the last major regulatory hurdle cleared for the deal.

Prior to China's approval, the merger had already received regulatory clearance from the U.S., European Union, and UK, indicating a significant international approval process.

This approval signals a potential easing of U.S.-China tensions in the tech sector, especially concerning semiconductor technology and cross-border trade.

Investors are optimistic, with Synopsys shares rallying following the news, reflecting market confidence in the merger's potential to unlock substantial market share and technological capabilities.

However, risks remain, including possible delays in SAMR approval beyond 2026 and the potential for new U.S. restrictions on exports, which could impact the strategic benefits of the deal.

The approval comes with conditions that require Synopsys to maintain existing customer contracts and allow renewal requests from Chinese clients, aligning with broader regulatory considerations.

The approval is seen as a pivotal moment for global semiconductor innovation, as it could facilitate more cooperation between the U.S. and China and benefit the broader tech industry.

The merger aims to position Synopsys as a dominant player in the electronic design automation (EDA) market, combining digital design tools with Ansys' simulation software to create a comprehensive silicon-to-systems platform.

This strategic move is expected to significantly impact the global semiconductor design market, potentially controlling a large share and fostering advancements in AI and high-performance computing.

Recent easing of U.S. export restrictions on chip-design software to China, along with improved trade relations such as the reduction of tariffs in June 2025, have facilitated this approval process.

The merger also involves strategic divestitures, such as the sale of optical and photonic software tools to Keysight, to address antitrust concerns and maintain competition in critical markets.

Overall, the deal underscores a broader trend of regulatory easing for cross-border tech transactions, which could shape the future landscape of international semiconductor and software markets.