Key Points
- Chip design firm Cadence is expected to pay over $100 million to settle a U.S. government probe.
- The investigation focuses on illegal sales to a Chinese military university involved in nuclear simulation.
- Cadence is accused of selling its technology to front companies to get around U.S. export restrictions.
- The settlement indicates that the U.S. is still enforcing export controls on China, even during ongoing trade talks.
Chip design software firm Cadence Design is expected to pay over $100 million to settle a U.S. government investigation into its sales to a Chinese military university. The university is reportedly involved in simulating nuclear explosions, according to sources familiar with the matter.
Cadence is accused of illegally selling its sensitive chip design technology to front companies that were representing China’s National University of Defense Technology (NUDT). The U.S. government added NUDT to a restricted trade list in 2015 to prevent it from utilizing American technology for its supercomputers, which are believed to support nuclear and other military simulations.
The investigation, which has been ongoing for over four years, found that Cadence sold its technology to NUDT approximately 50 times between 2015 and 2020 under an alias. Several employees at Cadence’s Chinese subsidiary were reportedly fired over the sales.
The potential settlement comes at a time when the U.S. and China are holding new trade talks. It signals that even as some restrictions are being relaxed as part of negotiations, the U.S. is still willing to crack down on export control violations.
The deal is not yet finalized, the sources said. Cadence, whose customers include major chipmakers such as Nvidia and Qualcomm, has previously acknowledged the investigation and stated that it was in settlement discussions.
