Cadence Design's $140 Million Export Control Violation Settlement with U.S.

Cadence Design Systems has settled with the U.S. government, agreeing to pay over $140 million after admitting to illegal sales of its chip design products to a Chinese military university. The Justice Department revealed that the firm violated export controls, selling software and hardware to front companies representing China's National University of Defense Technology (NUDT).

The San Jose-based tech company recorded a charge related to these legal proceedings in its latest quarterly results. This disclosure comes amidst U.S.-China trade talks, proving the U.S. continues to uphold export controls, especially concerning Chinese entities. Cadence's decision followed the U.S. Commerce Department's ongoing restrictions against NUDT due to its association with nuclear and military simulations.

As part of the plea agreement, Cadence will remain on probation for three years, committing to avoid repeat violations. The settlement confirms the Commerce and Justice Departments' relentless enforcement of export restrictions amid shifting diplomatic landscapes. Entities on the Entity List, including NUDT, signify a threat to U.S. national security. The ongoing geopolitical tensions continue to impact Cadence, as its revenue from China has shown a noticeable decline.

(With inputs from agencies.)