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yesterday

Cadence Pleads Guilty to Export Violations, Agrees to $140 Million Penalty

The plea ends a multiyear investigation into illegal sales of critical chip-design software to a sanctioned Chinese military university.

The logo of Cadence Design Systems is pictured outside the company's offices in San Jose, California, U.S., January 31, 2020. Picture taken January 31, 2020. REUTERS/Stephen Nellis/File Photo
China
FILE – The Department of Justice seals is seen during a news conference at the DOJ office in Washington, May 16, 2023. (AP Photo/Jose Luis Magana, File)

Overview

  • Cadence admitted conspiring to export electronic design automation tools to China’s National University of Defense Technology and its Central South CAD Center alias in breach of U.S. rules.
  • The company will pay $140 million in criminal fines, civil penalties and forfeitures and accept three years of federal probation.
  • U.S. Commerce and Justice Departments traced about 50 unauthorized shipments from 2015 to 2020 that supported NUDT’s military and nuclear-simulation research.
  • Subpoenas issued in February 2021 and November 2023 spurred internal audits that led to the dismissal of several employees at Cadence’s Chinese subsidiary.
  • Cadence’s revenue from China fell from 17 percent in 2023 to 12 percent last year as regulatory and trade pressures intensified.