A data error cost GlobalFoundries $500,000! The US fined the firm for mistakenly shipping $17 million in products to SJ Semiconductor, a restricted Chinese company.
On Friday, the US government announced it would impose a $500,000 fine on GlobalFoundries, a US chipmaker, for shipping over $17 million in products to a Chinese company on a restricted trade list.
The Bureau of Industry and Security (BIS), which oversees US technology controls in China, revealed that GlobalFoundries sent 74 shipments of silicon wafers to SJ Semiconductor in eastern China from February 2021 to October 2022.
SJ Semiconductor was added to the entity list in December 2020 due to its connections with Semiconductor Manufacturing International Corporation (SMIC), China’s leading chip manufacturer. The US government associates SMIC with the Chinese military and considers it a national security threat.
According to the government protocol, American companies must obtain special licenses from the Commerce Department to ship technology to firms on the entity list.
GlobalFoundries mistakenly shipped products to SJ Semiconductor due to a data error in its screening system, leading to a financial penalty. This is notable since the company recently received $1.5 billion in CHIPS Act funding and $1.6 billion in federal loans to expand production in New York.
GlobalFoundries voluntarily reported the issue and cooperated with the investigation, leading to a reduced penalty compared to what could have been imposed under federal law.
Matthew S. Axelrod, assistant secretary for export enforcement at BIS, emphasised the need for US companies to be vigilant when shipping semiconductor materials to Chinese entities and encouraged voluntary disclosures when mistakes occur.
In its statement, GlobalFoundries expressed regret for the “inadvertent action” that led to the shipment of products to an entity on the restricted list, noting its history of compliance as a supplier to the Department of Defence.
Some companies are continuing operations despite extensive restrictions on advanced chip sales to China. Taiwan Semiconductor Manufacturing Company reported its chips were found in Huawei devices, leading to calls for stricter controls, though these efforts face pushback from allied governments and concerned companies.
