THE US said on Friday (Nov 1) it imposed a US$500,000 penalty on New York-based GlobalFoundries, the world’s third-largest contract chipmaker, for shipping chips without authorisation to an affiliate of blacklisted Chinese chipmaker Semiconductor Manufacturing International Corporation (SMIC).
In a statement, the Commerce Department said GlobalFoundries sent 74 shipments worth US$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 US companies to be hypervigilant when sending semiconductor materials to Chinese parties,” assistant secretary for export enforcement Matthew Axelrod said 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. GlobalFoundries said the company regrets “the inadvertent action, due to a data-entry error made prior to the entity listing”, which caused it to accidentally ship the legacy chips without a license. “We strive to, and believe we have, a world-class trade compliance programme that sets the standard for the foundry industry,” it added.
US lawmakers have grown more concerned that the Commerce Department, which oversees export policy, may not be aggressively enforcing its regulations as Washington seeks to stop China from receiving sensitive US technology that could bolster its military.
Influential Democratic Senator Mark Warner criticised the Biden administration for “apparent lax monitoring” of TSMC 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.
It also comes as GlobalFoundries, majority owned by Abu Dhabi’s sovereign wealth fund Mubadala Investment, is slated to receive around US$1.5 billion from the Commerce Department to build a new semiconductor production facility in Malta, New York, and expand existing operations there and in Burlington, Vermont.
The grant is part of a US programme to encourage chipmakers to expand production in the United States. REUTERS
