GlobalFoundries (GF) has been fined $500,000 by the Department of Commerce for shipping chip components to a company on the US government’s entity list.
In a statement, the Bureau of Industry and Security (BIS) said the chipmaker had sent wafers valued at approximately $17.1 million to SJ Semiconductor (SJS), an affiliate of Semiconductor Manufacturing International Corp (SMIC) – China’s largest contract chipmaker.
However, BIS did note that GlobalFoundries voluntarily disclosed the breach to the department, took “remedial measures” and cooperated with the investigation. The BIS’ Office of Export Enforcement said the company’s voluntary self-disclosure and willingness to work with the department during the investigation resulted in a “significant reduction in the monetary penalty.”
BIS said the breach occurred between February 2021 and October 2022, during which time GlobalFoundries sent 74 separate shipments of semiconductor wafers to SJS without the necessary license or authorization.
While SJS was not a GF customer – it was a third-party outsource assembly and test service provider of a GF customer – BIS said that GF was aware that a license was needed for shipments destined for SJS. The oversight was the result of a data entry error, meaning SJS was not caught in GF’s transaction screening system.
“We want US companies to be hypervigilant when sending semiconductor materials to Chinese parties,” said assistant secretary for export enforcement, Matthew S. Axelrod. “And when, as here, that vigilance falls short and semiconductor materials have gone where they shouldn’t, we want companies to make voluntary disclosures, remediate, and cooperate with us.”
In February 2024, GF was awarded $1.5bn by the US government under the CHIPS and Science Act to help expand the company’s existing fab in Malta, New York.
DCD has reached out to GlobalFoundries for comment.
GlobalFoundries is not the only chip company currently under investigation by the Department of Commerce regarding the potential violation of US export rules.
In September 2023 the department opened an investigation into Applied Materials for allegedly facilitating the shipment of chip manufacturing tools to China without an export license. The investigation relates to claims that Applied Materials bypassed US sanctions by shipping hundreds of millions of dollars worth of semiconductor manufacturing equipment to the partly Chinese state-owned SMIC via a South Korean subsidy.
The investigation is still ongoing and no information about when Applied Materials allegedly made the shipment in question has been disclosed.
