The Bureau of Industry and Security (BIS) imposed a $95 million administrative penalty on Cadence Design Systems Inc. on July 28, 2025, for illegal exports of Electronic Design Automation (EDA) hardware, software, and semiconductor design technology to Entity List parties in China. Cadence admitted that employees of its Chinese subsidiary knowingly transferred sensitive U.S. technology to entities developing supercomputers in support of China’s military modernization and nuclear weapons programs. The named recipient entities include the National University of Defense Technology (NUDT) and Tianjin Phytium Information Technology (Phytium). Cadence concurrently signed an agreement with the U.S. Department of Justice that includes $45 million in forfeitures.
What it means
Cadence admitted to 56 violations of the Export Administration Regulations (EAR) occurring between September 2015 and September 2020. The company sold EDA products to NUDT through an alias, Central South CAD Center (CSCC), with exports to that account valued at $45,305,317.41. BIS found that Cadence had knowledge or reason to know NUDT was the end-user: equipment sold or loaned to CSCC was installed on the NUDT campus, and CSCC and NUDT shared personnel. Cadence shipped controlled items to NUDT in violation of EAR for more than three years before freezing the CSCC account.
After freezing the CSCC account, Cadence agreed to assign its CSCC contracts to Phytium and to transfer hardware, software, and technology previously exported to CSCC to Phytium. Phytium and CSCC were closely linked, including through overlapping personnel. Those transfers produced two additional violations occurring between approximately November 2020 and February 2021. Under Secretary of Commerce for Industry and Security Jeffrey I. Kessler said: “Companies that violate export laws and compromise national security should face strong penalties that deter future wrongdoing. Today’s action shows BIS’s commitment to making this happen.” The case was investigated by BIS’s Office of Export Enforcement, San Jose Field Office, and the Federal Bureau of Investigation.
Key facts
- $95 million — BIS administrative penalty imposed on Cadence Design Systems Inc.
- $45 million — forfeitures under concurrent U.S. Department of Justice agreement
- 56 — EAR violations Cadence admitted to, occurring September 2015 to September 2020
- $45,305,317.41 — value of EDA hardware, software, and semiconductor design technology exported to CSCC (NUDT alias)
- 2 — additional violations from transfers to Phytium, approximately November 2020 to February 2021
- More than three years — period Cadence shipped controlled items to NUDT in violation of EAR before freezing the CSCC account
- Named Entity List recipients: National University of Defense Technology (NUDT), Tianjin Phytium Information Technology (Phytium), and other Entity List parties
- Investigating agencies: BIS Office of Export Enforcement, San Jose Field Office; Federal Bureau of Investigation
Source: U.S. Department of Commerce, Bureau of Industry and Security news release (bis.gov)