American GlobalFoundries fined $500,000 for supplying chips to a company associated with the Chinese SMIC

Since 2020, not only the largest contract chip manufacturer in China, SMIC, but also a number of related legal entities have been under US sanctions. As it turns out, the American GlobalFoundries, after the introduction of sanctions against SJ Semiconductor, sent it 74 batches of chips totaling $17.1 million. Having admitted to what they had done, GlobalFoundries accepted the need to pay a fine of $500,000.

Image source: GlobalFoundries

As representatives of American regulatory authorities in the field of export control, cited by Reuters, explain, GlobalFoundries itself admitted to the violation, but explained it as an error in paperwork that arose even before the imposition of sanctions against SJ Semiconductor. This error allegedly prevented GlobalFoundries from determining that SJ Semiconductor’s supply of products required export licenses that were highly likely to be denied.

SMIC denies its involvement in serving the interests of the Chinese defense industry, but it failed to avoid US sanctions. Representatives of GlobalFoundries expressed their willingness to continue to carefully follow the requirements of US legislation in the field of export controls, calling the corresponding system “the global standard for the contract chip manufacturing industry.”

GlobalFoundries, although financed by Arab investors, has American registration and even serves the interests of the American defense industry. It is also earmarked for about $1.5 billion in subsidies under the 2022 Chips Act, which should be spent on expanding and modernizing the company’s facilities in the United States.