The EDA software giant will pay a combined penalty of over $140 million to the DOJ and BIS.
www.eetimes.com, Jul. 29, 2025 –
In a landmark enforcement action underscoring the escalating technological rivalry between the United States and the People’s Republic of China (PRC), Cadence Design Systems Inc. has agreed to plead guilty to charges of unlawfully exporting sensitive semiconductor design tools to a restricted Chinese military university.
Cadence filed a 8-K regulatory statement to the Securities and Exchange Commission announcing that it reached a settlement with the Bureau of Industry and Security and the Department of Justice that resolve these matters.
“Since the conduct occurred, Cadence has further invested in and significantly enhanced its export compliance programs across its business, including implementing policies and procedures designed to proactively address evolving trade restrictions, and will continue to do so,” the statement reads.
“Cadence has agreed to accept responsibility for unlawfully exporting sensitive semiconductor design tools to a restricted Chinese military university and has implemented a strong export compliance program to help prevent any further illegal transmission of American technology,” said Assistant Attorney General for National Security John A. Eisenberg.
The company recently reported its Q2 2025 results, with revenue $1.275 billion, compared to revenue of $1.061 billion in Q2 2024.
The failure to voluntarily self-disclose the misconduct to the National Security Division, given the serious nature of the offense involving technology critical for military and nuclear simulations, influenced the severity of the penalty.
Cadence faces aggregate criminal and civil penalties totaling over $140 million, a stark warning to global firms navigating increasingly stringent U.S. export controls.
The coordinated resolution involves a criminal guilty plea to one count of conspiracy to commit export control violations, resulting in a payment of nearly $118 million to the Department of Justice, alongside a parallel civil penalty of over $95 million to the Department of Commerce’s Bureau of Industry and Security (BIS). After the Department of Justice and BIS credit payments made by Cadence under the coordinated agreements, Cadence will pay aggregate net criminal and civil penalties and forfeiture totaling more than $140 million.
Accordingly, the amount of the criminal monetary penalty attributable to the criminal fine reflects a 20% reduction off the statutory maximum fine.
EDA software is a fundamental “geopolitical chokepoint” in the global technology supply chain, not merely a commercial product but a critical enabling technology. Without EDA tools, modern semiconductors, containing billions of transistors, would be impossible to design due to their immense complexity.
The central end-user in the Cadence case was the National University of Defense Technology (NUDT), a premier military academic institution directly under the PRC’s Central Military Commission.