Synopsys Receives Federal Subpoena Over China Sales

Technology firm is under scrutiny as federal investigators investigate whether Chinese customers have military ties.

January 5, 2022

Synopsys (SNPS), a provider of electronic design automation (EDA) used to design and test integrated circuits, is in the crosshairs of the federal government’s Bureau of Industry and Security (BIS), which creates what is known military end user list, a compilation of more than one hundred Chinese and Russian companies considered to be military end users.

In its latest 10-K, Synopsys disclosed it has received a subpoena from BIS related to the company’s sales to Chinese customers:

“...we recently received an administrative subpoena from BIS requesting production of information relating to transactions with certain Chinese entities. We believe we are in full compliance with all applicable regulations and are currently working with BIS to respond to its subpoena. However, inquiries, such as this one, are subject to a number of uncertainties, and we cannot predict the outcome of this inquiry or its potential effect on our operations or financial condition.”

Synopsys did not disclose when it received the subpoena. We do know federal investigators have been looking into the IC industry’s sales to China for at least a year. In July 2021, Cadence Design Systems (CDNS), which competes with Synopsys in the IC design space, revealed it received a subpoena from BIS related to China sales but did not disclose it for nearly a half a year.

Entity list violations can result in administrative and criminal penalties. When DuDil contacted Synopsys to learn exactly when it received the subpoena, Synopsys refused to disclose the date.

Related: CDNS, MFGP

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