Further, in Oct 2020, while Cadence and Cadence China had knowledge that items previously sold and exported to CSCC had in fact been exported to NUDT in violation of US export control laws, Cadence consented to CSCC’s assignment to Phytium, a semiconductor company closely associated with CSCC and NUDT in China, of CSCC’s contracts for Cadence EDA tools. Prior to the transfer of Cadence’s business from CSCC to Phytium in or about Oct 2020, Cadence’s business with CSCC included contractual agreements with Phytium, reflecting Phytium’s ongoing collaboration with CSCC and NUDT during the period in which CSCC was used as an alias for NUDT. Cadence, through its subsidiaries, including Cadence China also had knowledge that Cadence China’s business with CSCC involved Phytium, and that NUDT personnel were affiliated with Phytium. Some of Cadence China’s contracts with CSCC listed Phytium as the contractual party and stated that the work would occur at NUDT. Internal Cadence communications show certain Cadence employees’ understanding that CSCC and Phytium were effectively the same entity both before and after the decision to transfer Cadence China’s business from CSCC to Phytium. Cadence and Cadence China transferred US-origin EDA software and IP technology to Phytium until Feb 2021. In Mar 2021, Cadence placed Phytium on export hold as a result of its internal compliance review and discontinued transactions with Phytium without completing all of the originally anticipated transfers, including any hardware transfers. Phytium was later designated on the Entity List in Apr 2021.
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