The U.S. said on Friday it imposed a $500,000 penalty on New York-based GlobalFoundries (GFS.O), the world’s third-largest contract chipmaker, for shipping chips without authorization to an affiliate of blacklisted Chinese chipmaker SMIC.
In a statement, the Commerce Department said GlobalFoundries sent 74 shipments worth $17.1 million to SJ Semiconductor, an affiliate of SMIC, without seeking a license. Both SMIC and SJ Semiconductor were added to a trade restriction list known as the entity list in 2020 over SMIC’s alleged ties to the Chinese military-industrial complex. SMIC has denied wrongdoing.
Exports to firms on the list require a difficult-to-obtain license, which GlobalFoundries did not apply for, the department said.
“We want U.S. companies to be hypervigilant when sending semiconductor materials to Chinese parties,” Assistant Secretary for Export Enforcement Matthew Axelrod said in a statement that highlighted GlobalFoundries’ voluntary disclosure of the violation and extensive cooperation with the Commerce Department.
SMIC, SJ Semiconductor did not immediately respond to requests for comment. In a statement, GlobalFoundries said the company regrets “the inadvertent action, due to a data-entry error made before the entity listing,” which caused it to ship the legacy chips without a license accidentally. “We strive to, and believe we have, a world-class trade compliance program that sets the standard for the foundry industry,” it added.
U.S. lawmakers have grown more concerned that the Commerce Department, which oversees export policy, may not aggressively enforce its regulations as Washington seeks to stop China from receiving sensitive U.S. technology that could bolster its military.
Influential Democratic Senator Mark Warner criticized the Biden administration for “apparent lax monitoring” of TSMC (2330.TW), following revelations a chip produced by the Taiwanese chipmaker ended up in a product made by China’s heavily sanctioned Huawei, Reuters reported on Thursday.
(Source: Reuters)
