Screen displays the company logo for semiconductor and chip maker, GlobalFoundries Inc. during the company's IPO at the Nasdaq MarketSite in Times Square in New York.
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- - The U.S. imposed a $500,000 penalty on GlobalFoundries for shipping chips without authorization to an affiliate of blacklisted Chinese chipmaker SMIC.
- - GlobalFoundries sent 74 shipments worth $17.1 million to SJ Semiconductor, an affiliate of SMIC, without seeking a license, violating trade restrictions.
- - U.S. lawmakers have expressed concern over lax monitoring of semiconductor exports to China, as Washington seeks to prevent sensitive technology from bolstering the Chinese military.
(Reuters) -The U.S. said on Friday it imposed a $500,000 penalty on New York-based GlobalFoundries, the world's third-largest contract chipmaker, for shipping chips without authorization to an affiliate of blacklisted Chinese chipmaker SMIC.
In a statement, the Commerce Department said GlobalFoundries sent 74 shipments worth $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 U.S. companies to be hypervigilant when sending semiconductor materials to Chinese parties,” 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.
SMIC, SJ Semiconductor did not immediately respond to requests for comment. In a statement, 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 program that sets the standard for the foundry industry," it added.
U.S. 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 U.S. technology that could bolster its military.
Influential Democratic Senator Mark Warner criticized 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 Co, is slated to receive around $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 U.S. program to encourage chipmakers to expand production in the United States.
