The U.S. Commerce Department has fined New York-based GlobalFoundries, the world’s third-largest contract chipmaker, $500,000 for unauthorized chip shipments to SJ Semiconductor, a subsidiary of China’s SMIC (Semiconductor Manufacturing International Corp.). GlobalFoundries shipped 74 orders of legacy chips valued at $17.1 million to SJ Semiconductor without the required export license, which is mandated for companies on the U.S. entity list, a restriction list created to prevent technology from aiding foreign military development.
SMIC and its affiliates were added to the entity list in 2020 due to alleged connections with China’s military-industrial sector, allegations that SMIC has denied. GlobalFoundries reported the incident as a data-entry error, made before the 2020 listing, and has cooperated extensively with U.S. authorities. They emphasized their commitment to high standards in trade compliance.
U.S. lawmakers, including Senator Mark Warner, have voiced concerns about potentially lax enforcement of export regulations, especially following recent reports that a chip from Taiwan’s TSMC appeared in a device made by Huawei, another blacklisted Chinese company.
Interestingly, this development comes as GlobalFoundries is poised to receive $1.5 billion in federal grants for semiconductor production in the U.S., under a broader national initiative to strengthen domestic chip manufacturing. GlobalFoundries plans to use this funding to establish a new facility in Malta, New York, and expand its operations in Burlington, Vermont. The grant reflects ongoing efforts by the U.S. government to reduce reliance on foreign semiconductor manufacturing.
