Intel CEO says he'll personally approve all chip designs from here on out.
Lip-Bu Tan on today's earnings call:
I'm also instituting a policy. Every major chip design needs to be personally reviewed and approved by me before tape out.
He says it'll move Intel 'back towards a first time right mindset,' and that he's already 'taken steps to correct past mistakes regarding multi-threading capabilities' in future chips. Tan has a background in chip design and was CEO of chip design company Cadence for a decade. Follow topics and authors from this story to see more like this in your personalized homepage feed and to receive email updates. Sean Hollister Posts from this author will be added to your daily email digest and your homepage feed. See All by Sean Hollister
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Chip design software provider Cadence raises annual sales forecast
(Reuters) -Cadence Design Systems raised its sales forecast for the year on Monday, after the U.S. lifted export curbs on chip design software to China earlier this month, allowing the company to resume sales to the key market. Shares of the San Jose, California-based company rose 7% in extended trading after rising about 10% this year. The company expects annual revenue between $5.21 billion and $5.27 billion, up from its earlier forecast of sales between $5.15 billion and $5.23 billion. "Cadence delivered excellent results for Q2, with broad-based strength across all businesses, more than offsetting the impact of the temporary restrictions on exports to China imposed on May 23rd," Chief Financial Officer John Wall said in a statement. Removal of the restrictions, which were announced late in May, allowed Cadence to again service the market that brings over 10% of revenue for the company, after an initial suspension of services to China had hurt sales and investor sentiment. The company reported revenue of $1.28 billion for the June quarter, beating analysts' average estimate of $1.25 billion, according to data compiled by LSEG.
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an hour ago
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Cadence Reports Second Quarter 2025 Financial Results
Exceeded Q2 Guidance for Revenue & Non-GAAP EPS Raising 2025 Revenue, Non-GAAP EPS & Cash Flow Outlook SAN JOSE, Calif., July 28, 2025--(BUSINESS WIRE)--Cadence (Nasdaq: CDNS) today announced results for the second quarter of 2025. Second Quarter 2025 Financial Results Revenue of $1.275 billion, compared to revenue of $1.061 billion in Q2 2024 GAAP operating margin of 19.0%, compared to 27.7% in Q2 2024 GAAP diluted net income per share of $0.59, compared to $0.84 in Q2 2024 Non-GAAP operating margin of 42.8%, compared to 40.1% in Q2 2024 Non-GAAP diluted net income per share of $1.65, compared to $1.28 in Q2 2024 Quarter-end backlog was $6.4 billion and current remaining performance obligations ("cRPO"), contract revenue expected to be recognized as revenue in the next 12 months, was $3.1 billion GAAP results include a one-time charge relating to the $140.6 million settlements of our previously disclosed legal proceedings with the U.S. Department of Justice ("DOJ") and the Bureau of Industry and Security ("BIS") of the U.S. Department of Commerce "Cadence delivered an exceptional Q2, with 20% year-over-year revenue growth and stronger than expected bookings. This highlighted the strategic relevance of our AI-driven portfolio and the depth of our customer relationships," said Anirudh Devgan, president and chief executive officer. "The strength and breadth of our products are enabling us to lead through the accelerating waves of the AI Supercycle, from AI infrastructure build-out, to physical AI in autonomous systems, to the emerging frontier of science AI." "I am pleased to report that Cadence delivered excellent results for Q2, with broad-based strength across all businesses, more than offsetting the impact of the temporary restrictions on exports to China imposed on May 23rd," said John Wall, senior vice president and chief financial officer. "We are raising our 2025 revenue outlook to 13% growth year-over-year, and non-GAAP operating margin to 44%." CFO Commentary Commentary on the second quarter of 2025 financial results by John Wall, senior vice president and chief financial officer, is available at Business Outlook For fiscal year 2025, the company expects: Revenue in the range of $5.21 billion to $5.27 billion GAAP operating margin in the range of 28.5% to 29.5% Non-GAAP operating margin in the range of 43.5% to 44.5% GAAP diluted net income per share in the range of $3.97 to $4.07 Non-GAAP diluted net income per share in the range of $6.85 to $6.95 Operating cash flow in the range of $1.65 billion to $1.75 billion At the midpoint, the $50 million increase in operating cash flow outlook is primarily driven by the $50 million increase in revenue outlook. Cadence anticipates a $140.6 million cash outflow relating to the DOJ and BIS settlements. In addition, Cadence expects to benefit from approximately $140 million in reduced cash tax payments due to the immediate expensing of U.S. R&D expenditures under the One Big Beautiful Bill Act. The company utilizes a long-term projected non-GAAP tax rate, which reflects currently available information, as well as other factors and assumptions. The non-GAAP tax rate is subject to change for a variety of reasons, including the rapidly evolving global tax environment, significant changes in the company's geographic earnings mix, or other changes to the company's strategy or business operations. The company expects to use the current normalized non-GAAP tax rate through fiscal 2025 but will re-evaluate this rate periodically for significant items that may materially affect its projections. Reconciliations of the financial results and business outlook from GAAP operating margin, GAAP net income and GAAP diluted net income per share to non-GAAP operating margin, non-GAAP net income and non-GAAP diluted net income per share, respectively, are included in this press release. Business Highlights Launched Cadence Cerebrus AI Studio, an agentic AI implementation platform delivering up to 20% PPA improvement and 5x to 10x faster chip delivery time. Launched Millennium M2000 AI Supercomputer featuring Nvidia Blackwell, delivering AI-accelerated simulation at unprecedented speed and scale across engineering and science workloads. Core EDA, comprised of Cadence's digital, custom / analog and verification businesses, delivered 16% year-over-year revenue growth, driven by further proliferation of Cadence's AI portfolio. IP business delivered more than 25% year-over-year revenue growth, driven by product strength and a broadening silicon solutions portfolio. System Design & Analysis business achieved 35% year-over-year revenue growth driven by Cadence's multi-physics analysis platform and AI-driven optimization, which delivered superior results. Audio Webcast Scheduled Anirudh Devgan, president and chief executive officer, and John Wall, senior vice president and chief financial officer, will host the second quarter 2025 financial results audio webcast today, July 28, 2025, at 2 p.m. (Pacific) / 5 p.m. (Eastern). Attendees are asked to register at the website at least 10 minutes prior to the scheduled webcast. An archive of the webcast will be available starting July 28, 2025 at 5 p.m. (Pacific) and ending September 16, 2025 at 5 p.m. (Pacific). Webcast access is available at About Cadence Cadence is a market leader in AI and digital twins, pioneering the application of computational software to accelerate innovation in the engineering design of silicon to systems. Our design solutions, based on Cadence's Intelligent System Design™ strategy, are essential for the world's leading semiconductor and systems companies to build their next-generation products from chips to full electromechanical systems that serve a wide range of markets, including hyperscale computing, mobile communications, automotive, aerospace, industrial, life sciences and robotics. In 2024, Cadence was recognized by the Wall Street Journal as one of the world's top 100 best-managed companies. Cadence solutions offer limitless opportunities—learn more at © 2025 Cadence Design Systems, Inc. All rights reserved worldwide. Cadence, the Cadence logo and the other Cadence marks found at are trademarks or registered trademarks of Cadence Design Systems, Inc. All other trademarks are the property of their respective owners. This press release contains forward-looking statements, including Cadence's outlook on future operating results, financial condition, strategic objectives, business model and prospects, technology and product developments, backlog, industry trends, market growth, settlements of legal proceedings, tax payments and rates and other statements using words such as "anticipates," "believes," "expects," "intends," "plans," "will," and words of similar import and the negatives thereof. Forward-looking statements are subject to a number of risks, uncertainties and other factors, many of which are outside Cadence's control, and which may cause actual results to differ materially from expectations expressed or implied in the forward-looking statements, including, among others: (i) Cadence's ability to compete successfully in the highly competitive industries in which it operates and realize the benefits of its investments in research and development, including opportunities presented by AI; (ii) the success of Cadence's efforts to maintain and improve operational efficiency and growth; (iii) the mix of products and services sold, the timing of orders and deliveries and the ability to develop, install or deliver Cadence's products or services; (iv) changes in customer demands or supply constraints that could result in delays in purchases, development, installations or deliveries of Cadence's products or services, including those resulting from consolidation, restructurings and other operational efficiency improvements of Cadence's customers; (v) economic, geopolitical and industry conditions, including export controls, tariffs, other trade restrictions and other government regulations, as well as rising tensions and armed conflicts around the world; (vi) changes in tax laws, interest rate and currency exchange rate fluctuations, inflation rates, Cadence's increased debt levels and obligations and Cadence's ability to access capital and debt markets in the future; (vii) legislative or regulatory requirements; (viii) Cadence's pending acquisitions which remain subject to certain closing conditions, the acquisition of other companies, businesses or technologies or the failure to successfully integrate and operate them; (ix) potential harm caused by compromises in cybersecurity and cybersecurity attacks; (x) capital expenditure requirements and events that affect cash flow, liquidity or reserves, or estimates Cadence may take from time to time with respect to accounts receivable, taxes and tax examinations, litigation, regulatory or other matters; (xi) the effects of any litigation, regulatory, tax or other proceedings to which Cadence is or may become a party or to which Cadence or its products, services, technologies or properties are subject, including the settlements with the DOJ (which is subject to court approval) and BIS, Cadence's ongoing compliance, cooperation, audit and other obligations under the settlement agreements, any further inquiries or adverse actions by the court, the DOJ, BIS or other U.S. or foreign governmental authorities and any impact of the settlements on Cadence's operations and business dealings in China, U.S. government contracting business and other customer relationships; and (xii) Cadence's ability to successfully meet any environmental, social and governance targets and practices. In addition, the timing and amount of Cadence's repurchases of its common stock are subject to business and market conditions, corporate and regulatory requirements, stock price, acquisition opportunities and other factors. For a detailed discussion of these and other cautionary statements related to Cadence and its business, please refer to Cadence's filings with the U.S. Securities and Exchange Commission, including its most recent report on Form 10-K, subsequent reports on Form 10-Q and future filings. Cadence plans to file a current report on Form 8-K with more information about the DOJ and BIS settlements and will include further information in its Form 10-Q for the fiscal quarter ended June 30, 2025. All forward-looking statements in this press release are based on management's expectations as of the date of this press release and, except as required by law, Cadence disclaims any obligation to update these forward-looking statements to reflect future events or circumstances. GAAP to Non-GAAP Reconciliation Non-GAAP financial measures should not be considered as a substitute for or superior to measures of financial performance prepared in accordance with generally accepted accounting principles, or GAAP. Investors are encouraged to review the reconciliation of non-GAAP measures contained within this press release with their most directly comparable GAAP results. Investors are also encouraged to look at the GAAP results as the best measure of financial performance. To supplement Cadence's financial results presented on a GAAP basis, Cadence management uses non-GAAP measures that it believes are helpful in understanding Cadence's performance. One such measure is non-GAAP net income, which is a financial measure not calculated under GAAP. Non-GAAP net income is calculated by Cadence management by taking GAAP net income and excluding, as applicable, amortization of intangible assets, stock-based compensation expense, acquisition and integration-related costs including retention expenses, income or expenses related to investments, divestitures and Cadence's non-qualified deferred compensation plan, restructuring, loss related to contingent liability and other significant items not directly related to Cadence's core business operations, and the income tax effect of non-GAAP pre-tax adjustments. Cadence management uses non-GAAP net income because it excludes items that are generally not directly related to the performance of Cadence's core business operations and therefore provides supplemental information to Cadence management and investors regarding the performance of the business operations, facilitates comparisons to the historical operating results and allows the review of Cadence's business from the same perspective as Cadence management, including forecasting and budgeting. The following tables reconcile the specific items excluded from GAAP operating margin, GAAP net income and GAAP net income per diluted share in the calculation of non-GAAP operating margin, non-GAAP net income and non-GAAP net income per diluted share for the periods shown below: Operating Margin Reconciliation Three Months Ended June 30, 2025 June 30, 2024 (unaudited) GAAP operating margin as a percent of total revenue 19.0 % 27.7 % Reconciling items to non-GAAP operating margin as a percent of total revenue: Stock-based compensation expense 9.3 % 8.3 % Amortization of acquired intangibles 1.8 % 1.9 % Acquisition and integration-related costs 2.0 % 1.9 % Restructuring 0.0 % 0.0 % Non-qualified deferred compensation expenses 0.6 % 0.2 % Special charges 0.0 % 0.1 % Loss related to contingent liability* 10.1 % 0.0 % Non-GAAP operating margin as a percent of total revenue 42.8 % 40.1 % * Related to resolution of previously disclosed legal proceedings with the DOJ and BIS. Net Income Reconciliation Three Months Ended June 30, 2025 June 30, 2024 (in thousands) (unaudited) Net income on a GAAP basis $ 160,051 $ 229,520 Stock-based compensation expense 118,325 87,569 Amortization of acquired intangibles 23,703 20,155 Acquisition and integration-related costs 26,021 20,715 Restructuring 47 (33 ) Non-qualified deferred compensation expenses 7,778 1,697 Special charges — 1,233 Loss related to contingent liability* 128,545 — Other income or expense related to investments, divestitures and non-qualified deferred compensation plan assets (46,248 ) (27,048 ) Income tax effect of non-GAAP adjustments 31,658 16,890 Net income on a non-GAAP basis $ 449,880 $ 350,698 * Related to resolution of previously disclosed legal proceedings with the DOJ and BIS. Diluted Net Income Per Share Reconciliation Three Months Ended June 30, 2025 June 30, 2024 (in thousands, except per share data) (unaudited) Diluted net income per share on a GAAP basis $ 0.59 $ 0.84 Stock-based compensation expense 0.43 0.32 Amortization of acquired intangibles 0.09 0.07 Acquisition and integration-related costs 0.09 0.08 Restructuring — — Non-qualified deferred compensation expenses 0.03 0.01 Special charges — — Loss related to contingent liability* 0.47 — Other income or expense related to investments, divestitures and non-qualified deferred compensation plan assets (0.17 ) (0.10 ) Income tax effect of non-GAAP adjustments 0.12 0.06 Diluted net income per share on a non-GAAP basis $ 1.65 $ 1.28 Shares used in calculation of diluted net income per share 272,899 273,520 * Related to resolution of previously disclosed legal proceedings with the DOJ and BIS. Cadence Design Systems, Inc. Condensed Consolidated Balance Sheets June 30, 2025 and December 31, 2024 (In thousands) (Unaudited) June 30,2025 December 31,2024 Current assets: Cash and cash equivalents $ 2,822,762 $ 2,644,030 Receivables, net 670,166 680,460 Inventories 226,162 257,711 Prepaid expenses and other 503,453 433,878 Total current assets 4,222,543 4,016,079 Property, plant and equipment, net 482,131 458,200 Goodwill 2,599,798 2,378,671 Acquired intangibles, net 618,952 594,734 Deferred taxes 980,223 982,057 Other assets 605,051 544,741 Total assets $ 9,508,698 $ 8,974,482 Current liabilities: Accounts payable and accrued liabilities $ 766,636 $ 632,692 Current portion of deferred revenue 729,929 737,413 Total current liabilities 1,496,565 1,370,105 Long-term liabilities: Long-term portion of deferred revenue 154,448 115,168 Long-term debt 2,478,145 2,476,183 Other long-term liabilities 373,002 339,448 Total long-term liabilities 3,005,595 2,930,799 Stockholders' equity 5,006,538 4,673,578 Total liabilities and stockholders' equity $ 9,508,698 $ 8,974,482 Cadence Design Systems, Inc. Condensed Consolidated Income Statements For the Three and Six Months Ended June 30, 2025 and June 30, 2024 (In thousands, except per share amounts) (Unaudited) Three Months Ended Six Months Ended June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024 Revenue: Product and maintenance $ 1,170,510 $ 960,457 $ 2,281,360 $ 1,873,842 Services 104,931 100,224 236,447 195,942 Total revenue 1,275,441 1,060,681 2,517,807 2,069,784 Costs and expenses: Cost of product and maintenance 139,298 94,363 255,970 169,758 Cost of services 44,869 44,907 95,330 94,709 Marketing and sales 200,595 186,725 403,295 367,314 Research and development 442,057 370,740 881,159 749,698 General and administrative 69,029 63,436 132,127 132,152 Amortization of acquired intangibles 9,204 6,667 18,126 12,074 Loss related to contingent liability 128,545 - 128,545 - Restructuring 47 (33 ) (62 ) 247 Total costs and expenses 1,033,644 766,805 1,914,490 1,525,952 Income from operations 241,797 293,876 603,317 543,832 Interest expense (28,948 ) (12,905 ) (58,066 ) (21,597 ) Other income, net 67,758 34,739 91,048 103,518 Income before provision for income taxes 280,607 315,710 636,299 625,753 Provision for income taxes 120,556 86,190 202,669 148,590 Net income $ 160,051 $ 229,520 $ 433,630 $ 477,163 Net income per share - basic $ 0.59 $ 0.85 $ 1.60 $ 1.77 Net income per share - diluted $ 0.59 $ 0.84 $ 1.59 $ 1.74 Weighted average common shares outstanding - basic 271,294 270,912 271,633 270,259 Weighted average common shares outstanding - diluted 272,899 273,520 273,264 273,532 Cadence Design Systems, Inc. Condensed Consolidated Statements of Cash Flows For the Six Months Ended June 30, 2025 and June 30, 2024 (In thousands) (Unaudited) Six Months Ended June 30, June 30, 2025 2024 Cash and cash equivalents at beginning of period $ 2,644,030 $ 1,008,152 Cash flows from operating activities: Net income 433,630 477,163 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 106,592 87,202 Stock-based compensation 225,938 175,698 Gain on divestitures and investments, net (36,654 ) (80,599 ) Deferred income taxes 3,241 (9,506 ) ROU asset amortization and change in operating lease liabilities 2,629 (1,410 ) Other non-cash items 3,502 1,510 Changes in operating assets and liabilities, net of effect of acquired businesses: Receivables (11,211 ) (49,384 ) Inventories 7,528 (15,978 ) Prepaid expenses and other (24,201 ) (39,868 ) Other assets 12,239 (38,967 ) Accounts payable and accrued liabilities 115,603 (93,078 ) Deferred revenue 21,824 (18,599 ) Other long-term liabilities 3,964 15,013 Net cash provided by operating activities 864,624 409,197 Cash flows from investing activities: Purchases of investments (21,596 ) (2,095 ) Proceeds from the sale and maturity of investments 1,989 43,864 Proceeds from the sale of IP and other assets 11,500 - Purchases of property, plant and equipment (67,146 ) (78,800 ) Cash paid in business combinations, net of cash acquired (122,146 ) (720,821 ) Net cash used for investing activities (197,399 ) (757,852 ) Cash flows from financing activities: Proceeds from issuance of debt - 700,000 Payments of debt issuance costs - (944 ) Proceeds from issuance of common stock 78,322 133,272 Stock received for payment of employee taxes on vesting of restricted stock (94,334 ) (166,903 ) Payments for repurchases of common stock (525,016 ) (250,010 ) Net cash provided by (used for) financing activities (541,028 ) 415,415 Effect of exchange rate changes on cash and cash equivalents 52,535 (15,957 ) Increase in cash and cash equivalents 178,732 50,803 Cash and cash equivalents at end of period $ 2,822,762 $ 1,058,955 Cadence Design Systems, Inc. (Unaudited) Revenue Mix by Geography (% of Total Revenue) 2024 2025 GEOGRAPHY Q1 Q2 Q3 Q4 Year Q1 Q2 Americas 46% 49% 50% 49% 49% 48% 49% China 12% 12% 13% 13% 12% 11% 9% Other Asia 20% 19% 17% 17% 18% 19% 19% Europe, Middle East and Africa 17% 14% 14% 15% 15% 16% 16% Japan 5% 6% 6% 6% 6% 6% 7% Total 100% 100% 100% 100% 100% 100% 100% Revenue Mix by Product Category (% of Total Revenue) 2024 2025 PRODUCT CATEGORY Q1 Q2 Q3 Q4 Year Q1 Q2 Core EDA 76% 73% 70% 68% 71% 71% 71% Semiconductor IP 12% 13% 14% 13% 13% 14% 13% System Design and Analysis 12% 14% 16% 19% 16% 15% 16% Total 100% 100% 100% 100% 100% 100% 100% Cadence Design Systems, Inc. Impact of Non-GAAP Adjustments on Forward Looking Operating Margin As of July 28, 2025 (Unaudited) Three Months Ending Year Ending September 30, 2025 December 31, 2025 Forecast Forecast GAAP operating margin as a percent of total revenue 32% - 33% 28.5% - 29.5% Reconciling items to non-GAAP operating margin as a percent of total revenue: Stock-based compensation expense 9% 9% Amortization of acquired intangibles 2% 2% Acquisition and integration-related costs 2% 2% Loss related to contingent liability* 0% 2% Non-GAAP operating margin as a percent of total revenue† 45% - 46% 43.5% - 44.5% *Related to resolution of previously disclosed legal proceedings with the DOJ and BIS. †The non-GAAP measures presented in the table above should not be considered a substitute for financial results and measures determined or calculated in accordance with GAAP. Cadence Design Systems, Inc. Impact of Non-GAAP Adjustments on Forward Looking Diluted Net Income Per Share As of July 28, 2025 (Unaudited) Three Months Ending Year Ending September 30, 2025 December 31, 2025 Forecast Forecast Diluted net income per share on a GAAP basis $1.14 to $1.20 $3.97 to $4.07 Stock-based compensation expense 0.44 1.69 Amortization of acquired intangibles 0.10 0.37 Acquisition and integration-related costs 0.07 0.31 Non-qualified deferred compensation expenses - 0.02 Special charges - 0.01 Loss related to contingent liability* - 0.47 Other income or expense related to investments, divestitures and non-qualified deferred compensation plan assets - (0.16) Income tax effect of non-GAAP adjustments - 0.17 Diluted net income per share on a non-GAAP basis† $1.75 to $1.81 $6.85 to $6.95 *Related to resolution of previously disclosed legal proceedings with the DOJ and BIS. †The non-GAAP measures presented in the table above should not be considered a substitute for financial results and measures determined or calculated in accordance with GAAP. Cadence Design Systems, Inc. Impact of Non-GAAP Adjustments on Forward Looking Net Income As of July 28, 2025 (Unaudited) Three Months Ending Year Ending September 30, 2025 December 31, 2025 ($ in millions) Forecast Forecast Net income on a GAAP basis $314 to $330 $1,087 to $1,114 Stock-based compensation expense 120 462 Amortization of acquired intangibles 26 101 Acquisition and integration-related costs 20 86 Non-qualified deferred compensation expenses - 6 Special charges - 2 Loss related to contingent liability* - 129 Other income or expense related to investments, divestitures and non-qualified deferred compensation plan assets - (43) Income tax effect of non-GAAP adjustments - 47 Net income on a non-GAAP basis† $480 to $496 $1,877 to $1,904 *Related to resolution of previously disclosed legal proceedings with the DOJ and BIS. †The non-GAAP measures presented in the table above should not be considered a substitute for financial results and measures determined or calculated in accordance with GAAP. CDNS–IRCategory: Financial, Featured View source version on Contacts For more information, please contact:Cadence Investor Relations408-944-7100investor_relations@ Cadence Newsroom408-944-7039newsroom@
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an hour ago
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Exclusive-Cadence nears deal to pay over $100 million to US for China sales, sources say
By Karen Freifeld (Reuters) -Cadence Design is expected to pay over $100 million to the U.S. government as part of a deal to resolve an investigation into sales of its chip design products to a Chinese military university believed to be involved in simulating nuclear explosions, according to two people familiar with the matter. Cadence is accused of illegally selling chip design technology to front companies representing China's National University of Defense Technology, the sources said. NUDT's supercomputers are thought to support nuclear explosive simulation and military simulation activities, according to U.S. Commerce Department notices restricting shipments to the university. San Jose, California-based Cadence, which said earlier this year it began settlement discussions with the U.S. over sales to China in December, did not immediately respond to a request for comment, nor did NUDT. The Justice Department declined immediate comment. The Commerce Department did not immediately respond to a request for comment. The potential deal, which comes as the U.S. and China meet for new trade talks, shows the U.S. is still willing to enforce U.S. export controls on China, even as it relaxes some of the restrictions as part of negotiations. The sources said the deal is not finalized. NUDT was put on the Commerce Department's restricted trade list in 2015 to keep it from using U.S. technology to power its supercomputers, according to department postings. Other aliases and locations were added to the university's listing in 2019 and 2022, including Hunan Guofang Keji University, Central South CAD Center, and CSCC. The U.S. investigation into Cadence, which began more than four years ago, involves 'historical sales by Cadence to customers in China,' according to a company filing. Cadence received a subpoena from the U.S. Commerce Department in February 2021, demanding records related to certain customers in China. A related November 2023 subpoena followed from the Justice Department over the company's business activity in China. Cadence sold its EDA technology to NUDT through the CSCC or Central South CAD Center alias about 50 times between 2015 and 2020, according to one source familiar with the probe. Chip developer Tianjin Phytium Information Technology, which traces its roots to NUDT, also has been tied to Cadence sales for the university, another source said. Phytium was added to the restricted trade list in 2021. It did not immediately respond to a request for comment. Several employees at a Chinese subsidiary of Cadence were terminated over the sales, one of the sources said. Entities are placed on the restricted trade list, formally known as the entity list, for activities deemed contrary to U.S. national security or foreign policy interests. U.S. companies are not allowed to ship goods and technology to them without licenses from the Commerce Department, which are generally denied. Cadence will hold a call about its second-quarter financial results at 2 p.m. Pacific Time (2100 GMT) on Monday. Cadence, whose customers include major semiconductor manufacturers and companies such as Nvidia and Qualcomm, is known for its electronic computer-aided design software. Electronic design automation (EDA) tools are key to designing chips and verifying that they are bug-free. NUDT has developed chips to power university supercomputers, including Tianhe-2, once touted as the world's best supercomputer, which the U.S. believes has been used in research on or the development of nuclear explosive devices. Twelve percent of Cadence's revenue came from China last year, down from 17% in 2023, amid regulatory developments and geopolitical tensions. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
