The US on Friday said it imposed a US$500,000 penalty on New York-based GlobalFoundries Inc, the world’s third-largest contract chipmaker, for shipping chips without authorization to an affiliate of blacklisted Chinese chipmaker Semiconductor Manufacturing International Corp (SMIC, 中芯).
The US Department of Commerce in a statement said GlobalFoundries sent 74 shipments worth US$17.1 million to SJ Semiconductor Corp (盛合晶微半導體), an affiliate of SMIC, without seeking a license.
Both SMIC and SJ Semiconductor were added to the department’s trade restriction Entity List in 2020 over SMIC’s alleged ties to the Chinese military-industrial complex. SMIC has denied wrongdoing.
Photo: Reuters
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,” US 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.
GlobalFoundries in a statement 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 program that sets the standard for the foundry industry,” it added.
US lawmakers have grown more concerned that the commerce department, which oversees export policy, might not be aggressively enforcing its regulations as Washington seeks to stop China from receiving sensitive US technology that could bolster the Chinese People’s Liberation Army.
Influential Democratic Senator Mark Warner on Thursday criticized US President Joe Biden’s administration for “apparent lax monitoring” of Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) following revelations a chip produced by the Taiwanese chipmaker ended up in a product made by China’s heavily sanctioned Huawei Technologies Co (華為).
It also comes as GlobalFoundries, majority owned by Abu Dhabi’s sovereign wealth fund Mubadala Investment Co, is slated to receive about 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 program to encourage chipmakers to expand production in the US.
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