US Commerce Department Fines GlobalFoundries For “Chip Export” To China’s SMIC, Raising Questions On Effectiveness of US Export Policies

After TSMC, the US Commerce Department reportedly fined GlobalFoundries for supplying chips to an “affiliate” of China’s SMIC, raising huge concerns about the US’s export policies.

TSMC Is Now Followed By GlobalFoundries For Being Involved In “In-Direct” Chip Export To China

With the gigantic demand for semiconductors in China, global foundry players are unable to leave out the Chinese markets despite the influence of international trade policies. China is seen as one of the biggest industries when it comes to both semiconductor demand/supply. Hence, foundries such as TSMC and GF cannot cope with the influence of regional markets. In a new report by Reuters, the US Commerce Department has imposed a rather “modest” penalty of $500,000 on GlobalFoundries, citing that the firm has supplied chips without authorization to a “Chinese-backed” affiliate.

Diving a bit into details, it is reported that GlobalFoundries has sent 74 shipments worth $17.1 million to SJ Semiconductor without actually getting an official export license, which is why the trade has fallen outside of US laws. For those unaware, companies doing business with China, either through direct means or affiliates, are required to obtain an export license from the Commerce Department, after which the specific trade is allowed to be carried out, and in the case of GlobalFoundries, failure to acquire the permit has resulted in the imposition of a fine.

Interestingly, GlobalFoundries says that the export is a “data-entry error”, which occurred prior to listing client details, which is why the…