On 2nd November, the Bureau said in a statement:

"Today, as part of a settlement agreement, the Department of Commerce’s Bureau of Industry and Security (BIS) imposed a civil penalty of USD500,000 against GlobalFoundries U.S. Inc., a semiconductor wafer manufacturing company headquartered in Malta, New York, and its subsidiary, GlobalFoundries U.S. 2 LLC (collectively, “GlobalFoundries”).

The penalty relates to GlobalFoundries’ shipments of semiconductor wafers valued at approximately USD17.1 million to SJ Semiconductor (SJS), a company on the BIS Entity List, without the requisite licence or other authorisation from BIS. GlobalFoundries voluntarily disclosed the conduct to BIS, cooperated with the investigation by BIS’s Office of Export Enforcement (OEE), and took remedial measures after discovering the conduct at issue, which resulted in a significant
reduction in the penalty.

As alleged in the Proposed Charging Letter (PCL), between February 2021 and October 2022, GlobalFoundries violated the Export Administration Regulations (EAR) by sending 74 separate shipments of semiconductor wafers, collectively valued at approximately USD17.1 million, to SJS without the requisite licence or other authorisation from BIS.

At the time of the violations, GlobalFoundries was aware that shipments to SJS of items subject to the EAR required a BIS license. While SJS itself was not a GlobalFoundries customer, SJS was the third-party outsource assembly and test service provider (“OSAT”) designated by a GlobalFoundries’ customer and, as a result, should have been screened by GlobalFoundries’ transaction screening system. Due to a data entry error, however, SJS was not properly identified in
GlobalFoundries’ transaction screening system and consequently was not screened.

SJS is a Semiconductor Manufacturing International Corporation (SMIC)-related party. 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 evidence of activities between SMIC and entities of concern in the Chinese military-industrial complex.

The full order, settlement agreement and PCL are available online here
.