Cadence Guilty, Pays $140M for Exporting Semi Design Tools to PRC Military Uni(justice.gov)
justice.gov
Cadence Guilty, Pays $140M for Exporting Semi Design Tools to PRC Military Uni
https://www.justice.gov/opa/pr/cadence-design-systems-agrees-plead-guilty-and-pay-over-140-million-unlawfully-exporting
6 comments
Cadence China, a wholy controlled subsidiary of Cadence Design Systems went rogue, and Cadence Design Systems is on the hook.
Justice dept: used $140M fine
$100B Cadence: it wasn't very effective
$100B Cadence: it wasn't very effective
True, fines should be significantly higher for corporate malfeasance. Give them a $1 billion fine and they will start to consider but maybe they should change their behavior.
Or should target the actual perpetrators and not the company. Some executive somewhere is seeing this as a win in the cost of doing business and has no disincentive to do criminal business in the future. But if they were fined themselves then they wouldn’t be so bold.
The article explains the PRC was in on it. I doubt they're going to hold anyone in Cadence China accountable.
It also explains that it wasn’t a secret for Cadence US
The amount they seem to have made from the offence is 45 million, so the fine is twice that plus some more. I guess the idea is that you fine them enough that this particular business they’re doing is no longer feasible and hope they drop it.
The fine doesn’t need to be a significant portion of their earnings, just like a parking ticket needn’t be a significant portion of your wealth. It just needs to be high enough that the action that caused it makes them less than the act of not doing that.
The fine doesn’t need to be a significant portion of their earnings, just like a parking ticket needn’t be a significant portion of your wealth. It just needs to be high enough that the action that caused it makes them less than the act of not doing that.
The fine needs to be significant to prevent shoveling tools to the PRC Central Military Commission from being profitable as long as <1/3 of the time they are noticed.
Maybe fines should have two components, one determined by the harm caused, the other by the offender's tolerance to the penalty.
Their market cap is irrelevant here. What's more relevant is how much they made from the illegal export. For instance, it makes zero sense to fine Chipotle (market cap: $57B) a few billion, or even a few million dollars for health code violations in one of its restaurants, just because its market cap is in the tens of billions.
Fines should absolutely be proportional to the income of the entity being fined.
Not only should they be proportional but they should have an exponentially increasing rate for reoffense of the same or similar crime with a cooling off period for the escalation of a year or two.
Fines should never be a 'cost of doing business's for anyone. They should sting and dissuade offenders from reoffending.
Not only should they be proportional but they should have an exponentially increasing rate for reoffense of the same or similar crime with a cooling off period for the escalation of a year or two.
Fines should never be a 'cost of doing business's for anyone. They should sting and dissuade offenders from reoffending.
Going back to the example in my previous comment, does that mean you think Chipotle Mexican Grill, Inc. should be fined millions for health code violations in one of its restaurants, even if it's as a result of mangers/staff in one of the restaurants going rogue?
The fine for a first time offence at a massive chain restaurant should be proportional to whatever a mom and pop restaurant would pay.
The first one should be a slap in the face wake up call for the entity receiving it and the sequential should quickly grow to create an uneconomical situation for the offender such that they are forced to change their practices or go bankrupt.
This goes for all fines given out to private individuals, businesses, big and small, rich and poor.
The first one should be a slap in the face wake up call for the entity receiving it and the sequential should quickly grow to create an uneconomical situation for the offender such that they are forced to change their practices or go bankrupt.
This goes for all fines given out to private individuals, businesses, big and small, rich and poor.
>the sequential should quickly grow to create an uneconomical situation for the offender [...]
That's already the case. According to the plea agreement they paid $140M in fines for $45M worth of sales.
That's already the case. According to the plea agreement they paid $140M in fines for $45M worth of sales.
I wasn't able to find a source regarding sequential fines for reoffenses from this entity.
This. Fines are not "the cost of doing business". It's a tool that when leveraged properly can be used to get out of compliant entities, in compliance.
Top-down organizations don’t have non-systemic problems. In this thought experiment a Chipotle has “gone rogue” in order to meet imposed metrics.
In my opinion, if it's literally one restaurant, acting alone, not in compliance with corporate policy than the fine should be limited to that one restaurant's income.
If those health code violations resulted in smuggling ECCN intellectual property to denied parties then abso-fuckin-lutely!
"Exporting?" Why is China not using an "unofficial" version? (Honest question)
EDA vendors know this is a risk, so EDA tools constantly need to "phone back home" to load updates and validate licenses. Plenty of functionality falls apart as well without that connectivity or support.
Furthermore, the resources that you would need to spend constantly cracking newer versions just isn't worth it when similar capital could be spent building home grown alternatives.
Finally, cracking and building a clone does cause liability risks for Chinese companies attempting to expand abroad. Companies are companies first - even in China - and the appetite for Huawei getting completely blocked from all of the EU, Singapore, SK, JP, India, etc where both the large EDA vendors and Chinese vendors coexist makes it a proposition that isn't worth it.
Furthermore, the resources that you would need to spend constantly cracking newer versions just isn't worth it when similar capital could be spent building home grown alternatives.
Finally, cracking and building a clone does cause liability risks for Chinese companies attempting to expand abroad. Companies are companies first - even in China - and the appetite for Huawei getting completely blocked from all of the EU, Singapore, SK, JP, India, etc where both the large EDA vendors and Chinese vendors coexist makes it a proposition that isn't worth it.
> Furthermore, the resources that you would need to spend constantly cracking newer versions just isn't worth it when similar capital could be spent building home grown alternatives.
Zero of these programs have any level of copy protection remotely resembling Denuvo: no virtualization, debug symbols are commonly left intact.
Zero of these programs have any level of copy protection remotely resembling Denuvo: no virtualization, debug symbols are commonly left intact.
You don't need gaming style DRM like Denuvo to make it a pain. Logic Programming is hard, and bug fixes are constant - especially for anything 14nm and lower. A cracked EDA or PDK becomes useless fairly quickly if not constantly updated.
And the name of the game that's happening now is offering EDAs only via SaaS - the removing a major vector for piracy.
And the name of the game that's happening now is offering EDAs only via SaaS - the removing a major vector for piracy.
Yeah, but try using them without _constant_ support and see… even for mature nodes, even with experienced teams you keep running into tool limits that make it impossible to get anything done without going back to support.
Core functionality is typically bug free, but they do work with customers on new features, and will use those as case studies to showcase to even more customers.
> EDA tools constantly need to "phone back home" to load updates and validate licenses
This isn't true in my experience. Cadence, Synopsys, and Siemens tools all use local license files or license servers (mainly FlexLM). Updates are just downloaded from their website.
This isn't true in my experience. Cadence, Synopsys, and Siemens tools all use local license files or license servers (mainly FlexLM). Updates are just downloaded from their website.
You mean they stopped using FlexLM license manager that everyone knew how to hack to bits?
They upgraded FlexLM.
So what's the secret sauce that cadence is not allowed to sell to personas non gratas? The article just says EDA tools but that's so broad. Is KiCAD export restricted?
For EDA, gate-all-around technologies used in 2nm processes are banned from export by ITAR. This applies to device electrical modeling as well as physical design layout rules. You won’t find these GAA in KiCAD or OpenROAD.
I think for this case though it was specifically because Cadence sold a commercial product to a banned entity, instead of anything technology related.
I think for this case though it was specifically because Cadence sold a commercial product to a banned entity, instead of anything technology related.
> You won’t find these GAA in KiCAD or OpenROAD.
Is this actually because of legal requirements, or because of reality?
Nobody with access to a bleeding-edge node is using vastly inferior FOSS tools that can't actually work with a brand new fab PDK (which was produced specifically for Synopsys or Cadence tools.)
Is this actually because of legal requirements, or because of reality?
Nobody with access to a bleeding-edge node is using vastly inferior FOSS tools that can't actually work with a brand new fab PDK (which was produced specifically for Synopsys or Cadence tools.)
[deleted]
If you read the article, you will see that the technology is specifically semiconductor design tools required for developing high performance computing that the PRC would use for nuclear weapons development. Can you do that with KiCAD? No.
KiCAD might not be a great example, but you could with something like https://github.com/The-OpenROAD-Project/OpenROAD (or roughly along those lines - I'm not a hardware person), no?
The parent's question still seems applicable. Is this basically down to a judge to decide the line at which a certain technology is too advanced to export? Would open sourcing an EDA tool be illegal if it was sufficiently capable?
The parent's question still seems applicable. Is this basically down to a judge to decide the line at which a certain technology is too advanced to export? Would open sourcing an EDA tool be illegal if it was sufficiently capable?
Licensing as "open source" wouldn't be illegal, but the act of exporting would be. I've certainly seen libre software downloads that have click-throughs where you attest you're not in certain prohibited countries, IP blocks (eg Github does this site-wide AFAIK), etc. No idea if this will continue to be "enough" under this new fascist regime that doesn't care much for institutions like the rule of law. Probably fine up until it isn't, at which point ceasing and desisting would probably be enough unless you're deemed "woke" or some other kind of unperson.
(I'm not a member of any guilds. And I guess the downvote is for the political incorrectness. Plus ça change)
(I'm not a member of any guilds. And I guess the downvote is for the political incorrectness. Plus ça change)
> specifically semiconductor design tools required for developing high performance computing
I call that EDA for brevity
> Can you do that with KiCAD?
Yes, depending how you define "high performance computing" (my question here)
I call that EDA for brevity
> Can you do that with KiCAD?
Yes, depending how you define "high performance computing" (my question here)
Isn’t KiCAD limited to PCB design, or is my understanding out of date?
Cadence tooling is for end-to-end electronics design - from transistor/standard cell up to PCB.
So technically they’re both EDA tools, but one is in another league as far as sophistication goes.
Cadence tooling is for end-to-end electronics design - from transistor/standard cell up to PCB.
So technically they’re both EDA tools, but one is in another league as far as sophistication goes.
People have hacked kicad into doing layout with the e.g. skywater 130 PDK. I wouldn't recommend it, but it's possible.
There's a whole lot more to an EDA tool than just layout or running spice though.
There's a whole lot more to an EDA tool than just layout or running spice though.
The violations are listed by their specific ECCNs, which you can lookup here: https://www.bis.gov/regulations/ear/interactive-commerce-con...
"These exports or reexports included the following transactions between 2015 and 2020:
a) Ten (10) sales and exports of EDA hardware, including items classified under ECCN 3B991b.2.c;
b) Seventeen (17) sales and exports or reexports of EDA software, including items classified under ECCN 3D991 or designated EAR99;
c) Seven (7) sales and exports or reexports of semiconductor design technology, specifically IP, including items classified under ECCN 3E991; and
d) Twenty-Two (22) loans and exports of EDA hardware, including items classified under ECCN 3B991b.2.c and items designated EAR99 "
"These exports or reexports included the following transactions between 2015 and 2020:
a) Ten (10) sales and exports of EDA hardware, including items classified under ECCN 3B991b.2.c;
b) Seventeen (17) sales and exports or reexports of EDA software, including items classified under ECCN 3D991 or designated EAR99;
c) Seven (7) sales and exports or reexports of semiconductor design technology, specifically IP, including items classified under ECCN 3E991; and
d) Twenty-Two (22) loans and exports of EDA hardware, including items classified under ECCN 3B991b.2.c and items designated EAR99 "
Hmm... I wonder who the CEO of Cadence was at the time, and what company he is the current CEO of. If only Board of Directors actually did some due diligence.
Nõice, can we build a splash pad somewhere with these winnings.
Interesting. Sounds like Cadence China employees went rogue. Nonetheless, Cadence USA is on the hook.