US penalises GlobalFoundries US$500,000 for shipping chips to Chinese firm

The US imposed a US$500,000 penalty against GlobalFoundries, the world’s third-largest contract chipmaker, for shipping chips to a Chinese company without seeking authorisation, the Department of Commerce said on Friday.

In a statement, it said GlobalFoundries had sent 74 shipments worth US$17.1 million to a firm on a trade restriction list known as the entity list.

Exports to firms on the list require a difficult-to-obtain licence, which GlobalFoundries did not apply for, the department said.

GlobalFoundries did not immediately respond to a request for comment.

Lawmakers from both parties have expressed concern about whether the Commerce Department, which oversees export policy, is acting aggressively to enforce its regulations as Washington seeks to halt the flow of sensitive technology to China over fears it could be used to bolster the Chinese military.

Influential Democratic Senator Mark Warner has criticised the Biden administration for “apparent lax monitoring” of TSMC following revelations a chip produced by the Taiwanese chipmaker ended up in a product made by China’s heavily sanctioned Huawei Technologies.