US penalises GlobalFoundries US$500,000 for shipping chips to Chinese firm

The US said on Friday it had 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 SMIC.

In a statement, the US Commerce Department said GlobalFoundries sent 74 shipments worth US$17.1 million to SJ Semiconductor, an affiliate of SMIC, without seeking a licence.

Both SMIC and SJ Semiconductor were added to a trade restriction 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 licence, 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 in a statement.

SMIC, SJ Semiconductor and GlobalFoundries, which voluntarily disclosed the violation and cooperated extensively with the investigation, according to the Commerce Department, did not immediately respond to requests for comment.