Cadence to Pay $140 Million for Illegally Selling Chip Design Tech to Chinese University.

Cadence Design Systems has agreed to plead guilty and pay over $140 million to settle claims that it illegally sold semiconductor design technology to a Chinese military university through a front company between 2015 and 2021. The company, which provides design and verification tools for the semiconductor industry, will pay a fine of $61 million and forfeit an additional $79 million in profits. Cadence has not admitted to any wrongdoing but has agreed to cooperate with the U.S. government's investigation.

Cadence Design Systems (CDNS) has agreed to plead guilty and pay over $140 million to settle charges that it illegally sold semiconductor design technology to a Chinese military university through a front company between 2015 and 2021. The company, which provides design and verification tools for the semiconductor industry, will pay a fine of $61 million and forfeit an additional $79 million in profits. Cadence has not admitted to any wrongdoing but has agreed to cooperate with the U.S. government's investigation.

The settlement comes amidst ongoing geopolitical tensions and trade negotiations between the U.S. and China. The U.S. Department of Commerce placed the National University of Defense Technology (NUDT) on a restricted trade list in 2015 due to its use of U.S.-origin components in supercomputers believed to support nuclear explosive simulation and military operations. NUDT has been on the entity list since then, with additional aliases and locations added in 2019 and 2022.

Cadence received a subpoena from the U.S. Commerce Department in February 2021 and a subsequent subpoena from the Justice Department in November 2023. The investigation into Cadence began more than four years ago and involved historical sales to customers in China. The company noted a charge related to the legal proceedings in its quarterly results released on Monday.

The settlement highlights the U.S.'s continued enforcement of export controls on China, even as it engages in new trade talks. Cadence's revenue from China has been decreasing, dropping from 17% in 2023 to 12% last year. The company's stock rose 7.8% after the announcement and its quarterly results.

Cadence Design Systems, Inc. (CDNS) is headquartered in San Jose, California, and is known for its electronic computer-aided design software. Its customers include major semiconductor manufacturers and companies such as Nvidia and Qualcomm.

References:
[1] https://www.reuters.com/world/china/cadence-plead-guilty-pay-140-million-us-china-sales-2025-07-28/
[2] https://seekingalpha.com/news/4473068-cadence-to-pay-140-million-to-us-for-selling-chip-design-tech-to-chinese-university
[3] https://www.law360.com/articles/2370264/cadence-to-pay-140m-for-illegal-chip-design-exports-to-china
[4] https://www.justice.gov/opa/pr/cadence-design-systems-agrees-plead-guilty-and-pay-over-140-million-unlawfully-exporting