November 5, 2024 — GlobalFoundries, the world’s third-largest semiconductor foundry, has been fined $500,000 by the U.S. Bureau of Industry and Security (BIS) for unauthorized shipments of chips to SJ Semiconductor, an affiliate of the blacklisted Chinese chipmaker SMIC. The fine follows a Reuters report detailing 74 unlicensed shipments valued at $17.1 million.
According to the BIS press release, GlobalFoundries failed to obtain the necessary licenses before shipping the items, which are subject to the Export Administration Regulations (EAR). While SJ Semiconductor wasn’t a direct GlobalFoundries customer, it served as an outsource assembly and test service provider (OSAT) for one of GlobalFoundries’ clients, necessitating screening under GlobalFoundries’ transaction screening system. The BIS stated that GlobalFoundries was aware of the licensing requirements.
GlobalFoundries attributed the violation to a “data-entry error made prior to the entity listing,” resulting in the unintentional shipment of legacy chips. The company expressed regret for the inadvertent action. Both SMIC and SJ Semiconductor were added to the U.S. Entity List in 2020 due to alleged ties to China’s military-industrial complex; SMIC has denied any wrongdoing.
