U.S. fines GlobalFoundries $500,000 for export violations

The Biden administration of the United States recently announced a fine of $500,000 against chipmaker GlobalFoundries because the company had violated regulations by shipping more than $17 million worth of wafers to SJ Semiconductor, which was included in the Entity List managed by the U.S. Bureau of Industry and Security (BIS). According to data, SJ Semiconductor was a 55.87%-owned subsidiary of Semiconductor Manufacturing International Corporation (SMIC), and was therefore included in the Entity List by the U.S. Department of Commerce in 2020. However, in April 2021, SMIC announced that it had sold its equity in SJ Semiconductor to other investors for a total transaction price of approximately $397 million, recording transaction proceeds of approximately $231 million. During this period, GlobalFoundries illegally sent 74 batches of wafers to SJ Semiconductor between February 2021 and October 2022, with a total value of more than $17 million. GlobalFoundries said the violation was due to a data error that failed to mark SJ Semiconductor in its screening process. Despite the violations, GF voluntarily disclosed the shipments and fully cooperated with BIS’s investigation, resulting in a significantly reduced fine compared to the potential maximum penalty of $500,000.