Supply Chain

Supply Chain Partners

Our supply chain is divided between spend for goods and services that are either directly incorporated into our manufactured products (direct) or goods and services that are not incorporated into our manufactured products (indirect). We rely on trusted manufacturing partners for the majority of our technology production. These partners manage the relationships with first and second tier suppliers for parts and raw materials. We have business continuity programs in place to identify and mitigate risk factors in the supply chain for various uncertainties that could adversely affect our business, financial condition, or results of operations. Our risk factors are discussed in detail in the Annual Report on Form 10-K. Cadence leverages suppliers to support our operations such as: • Computer, Electrical, Optical, and Office Equipment • Telecommunications, Shipping, and Postal Services • Financial Intermediation, Professional Services, Real Estate

Activities, and Data Centers

• Travel, Hotels, and Restaurants Cadence is proud to share that our Hardware System Verification (HSV) operations, including oversight and management of manufacture and services of enterprise emulation platforms, maintains ISO 9000 Certification for quality management and assurance. The process approach and principle of continual improvement of ISO 9001 govern the sustainability of our supply chain. During the reporting period, we continued the process of shifting to collocated data centers, which provide greater opportunity to use renewable energy to power our data center needs.

Engaging with Suppliers on Sustainability

We are committed to extending the rigorous ESG-aligned governance standards discussed in this report to our partners with whom we do business. As such, we published our inaugural Supplier Code of Conduct in 2020. We shared this Code with all our suppliers and we required all new suppliers in North America and EMEA to acknowledge the Code. Since the rollout of this program in of 2020, 100% of new suppliers acknowledged the Code. In 2020, we also developed a supplier questionnaire that focuses on sustainability issues, including our suppliers’ governance of climate change, natural resources, labor, data security, ethics and integrity. We will be collecting responses to this survey in conjunction with our business reviews with key suppliers: a subset of 50 suppliers who comprise the majority of Cadence’s supply chain spend. Establishing this baseline data will enable us to identify and assess risks and opportunities within our value chain. Finally, we focused our efforts during the reporting period on diversity and inclusion in Cadence’s supply chain. We leveraged a third party to identify how many of our suppliers meet a diversity criterion such as woman, veteran, disability or minority-owned, and their related certifications. With this data, Cadence will be able to identify how to best engage with and empower these value chain partners.

Human Rights in the Supply Chain

We believe that no individual should be subjected to any form of forced labor, slavery or human trafficking, and we will take necessary steps to prevent forced labor, slavery or human trafficking from existing within Cadence and to reduce the possibility of forced labor, slavery or human trafficking taking place in our supply chains, by requiring our new suppliers and partners to be bound by obligations to comply with all applicable laws. The 2015 UK Modern Slavery Act informs our management of these issues, and Cadence’s position can be viewed in full on our website at https://www.cadence.com/ en_US/home/company/corporate-governance.html. Cadence is also committed to responsible sourcing of materials for its products and seeks to avoid the use of conflict minerals (tin, tungsten, tantalum, and gold) sourced from the Democratic Republic of the Congo and adjoining countries that may directly or indirectly finance or benefit armed groups that engage in human rights abuses. We also support industry efforts, such as the Conflict Free Sourcing Initiative, to enable companies to source conflict-free minerals. And, we expect the same from our suppliers. We set forth our expectations for our suppliers in our Conflict Minerals Policy Statement located on our website at http://conflictminerals.cadence.com.