By Jeffrey A. Newman Esq.
The demand for semiconductor chips and related design tools for sale in China has lead some companies to ignore export controls and in recent cases, this has lead to criminal investigations and large fines for those companies. In June of this year, Cadence Design Systems Inc. a multinational electronic design automation tech comany in San Jose Calfironia agreed to plead guilty to charges that it committed criminal violations of export controls by selling EDA hardware, software and semiconductor design intellectual property to the Chinese National University of Defense Technology a university under the peadership of the PRC’s Cedntral Military Commission. Cadence agreed to plead guilty and pay over $140 Million for the unlawful exporting of the semiconductor info. Please agreement: https://www.justice.gov/d9/2025-07/cr_25-00217-ejd-02_plea_agreement.pdf
According to Cadence’s admissions and court documents, from February 2015 to April 2021, Cadence and its indirectly owned and wholly controlled subsidiary in the PRC, Cadence Design Systems Management (Shanghai) Co. Ltd. (Cadence China), engaged in a conspiracy to commit export control violations in connection with the provision of EDA tools that were subject to the Export Administration Regulations (EAR) to NUDT through Central South CAD Center (CSCC), an alias for NUDT, and another associated entity, Phytium Technology Co. Ltd. (Phytium), without seeking or obtaining the requisite licenses from BIS. Specifically, Cadence, Cadence China, and their employees exported, reexported, and transferred in-country U.S.-origin EDA tools to CSCC in the PRC, despite having knowledge that CSCC was an alias for NUDT. As a result, Cadence and Cadence China exported and caused to be exported EDA tools at least 59 times through September 2020, when Cadence terminated Cadence China’s business relationship with CSCC due to CSCC’s association with NUDT. In court documents, Cadence admitted that Cadence China employees installed EDA hardware on NUDT’s Changsha, China, campus and that NUDT personnel downloaded EDA software and IP technology from Cadence’s download portals while Cadence and Cadence China, through its employees, had knowledge that NUDT had been added to the Entity List. On Feb. 18, 2015, the same day that NUDT was added to the Entity List, Cadence’s export control officer emailed Cadence and Cadence China employees that NUDT had been added to the Entity List “meaning that export licenses will be required if sales are made.” Further, in March 2016, a Cadence China employee authored a presentation for a quarterly sales review meeting with her colleagues stating (as translated from Chinese) that as of Feb. 18, 2015, the U.S. Department of Commerce had “embargoed” four national supercomputer centers in the PRC, including NUDT, due to U.S. microprocessor chips being used in the “TianHe” supercomputing systems believed to be used for nuclear explosion simulation. Cadence also admitted that its employees who conducted work at CSCC’s location on NUDT’s campus knew about connections between CSCC and the PRC military. Criminal information https://www.justice.gov/d9/2025-07/cr_25-00217-ejd-01_information.pdf
Individuals aware of such export violations may be able to being a False Claims Act action on behalf of the government which can yield whistleblower awards of between 15-30% of what the Government recovers from the violators.
Jeffrey Newman Law is a whistleblower law firm representing whistleblowers reporting violastions of export controls, tariff evasion and other kinds of WB cases. The firm website is www.JeffNewmanLaw.com . Attorney Newman can be reached at Jeff@Jeffnewmanlaw.com or at 978-880-4758
