Chip stocks were already hurting in 2022 when an expansion of U.S. restrictions on chip exports to China was announced on Oct. 7 and sent the semiconductor industry further into a slump. As measured by the iShares Semiconductor ETF (NASDAQ: SOXX), chip stocks are down some 44% so far in 2022 -- their worst performance since the Great Recession in 2008-09.

These new measures cast further doubts on how quickly the makers of the building blocks of tech will recover, since many of these companies rely heavily on sales to China. Governments around the world are doling out funding to promote domestic chip production (like the CHIPS and Science Act in the U.S.), but measures like this will take time to trickle through the industry and offset any loss of sales to China.

If this has you worried, you might consider giving electronic design automation (EDA) companies Synopsys (NASDAQ: SNPS) and Cadence Design Systems (NASDAQ: CDNS) a careful look.

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Source Fool.com