Globalfoundries fined for supplying wafers to China’s SJ Semi
New York headquartered foundry Globalfoundries Inc. has been fined US$500,000 by the US Bureau of Industry and Security (BIS) for shipping wafers to SJ Semiconductor Corp. (Jiangyin, China).
SJ Semiconductor (SJS), a company with links to China’s leading foundry SMIC, is on the US Department of Commerce Entity List, which means companies require a license to trade with it.
Globalfoundries was processing wafers for a third party that was using SJ Semi as an outsource semiconductor assembly and test (OSAT) services provider. On 74 occasions between February 2021 and October 2022 Globalfoundries sent wafers with a value of US$17.1 million directly to SJ Semiconductor.
Globalfoundries found the breach of the rules itself – which arose due to a data entry error in a global trading management software system – and reported it to BIS.
“We want US companies to be hypervigilant when sending semiconductor materials to Chinese parties,” said Assistant Secretary for Export Enforcement Matthew Axelrod, in a statement. “And when, as here, that vigilance falls short and semiconductor materials have gone where they shouldn’t, we want companies to make voluntary disclosures, remediate, and cooperate with us.”
While SJ Semiconductor was not itself a Globalfoundries’ customer, as a shipping destination it should have been flagged by the firm’s transaction screening system and in the absence of a license deliveries withheld.
Chinese foundry SMIC and its related entities – including SJS – were added to the BIS Entity List in 2020 as a result of China’s military-civil fusion doctrine and links between SMIC and the Chinese military.
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