Monday, November 4th 2024
GlobalFoundries Faces $500,000 Sanction Fine, Risking Its $1.5 Billion in CHIPS Act Funding
GlobalFoundries faces a $500,000 fine from the US Commerce Department for breaching export controls by shipping $17.1 million worth of chips to SJ Semiconductor (SJS), a blacklisted Chinese firm affiliated with Semiconductor Manufacturing International Corporation (SMIC). The company made 74 unauthorized shipments between February 2021 and October 2022, delivering nearly 5,700 wafers. The chipmaker attributed the violation to a data entry error in its Oracle trade management system, where SJS was incorrectly recorded under a direct customer's shipping details. While SJS had previously handled GlobalFoundries' chips as a third-party assembly provider, both SJS and SMIC were placed on the Entity List in 2020 due to suspected military ties.
GlobalFoundries received a significantly reduced fine due to its voluntary disclosure and cooperation avoiding a potential fine of up to $34.2 million. "GlobalFoundries' voluntary self-disclosure (VSD) and extensive cooperation throughout the investigation resulted in a significant reduction in the monetary penalty, which is the main incentive of our VSD policies," said John Sonderman, director of the Office of Export Enforcement (OEE) within the Commerce Department. The incident comes as the company anticipates $1.5 billion in CHIPS Act funding for manufacturing expansion. For comparison, the department previously fined Seagate $300 million in April 2023 for shipping $1.1 billion worth of drives to Huawei.
Source:
The Register
GlobalFoundries received a significantly reduced fine due to its voluntary disclosure and cooperation avoiding a potential fine of up to $34.2 million. "GlobalFoundries' voluntary self-disclosure (VSD) and extensive cooperation throughout the investigation resulted in a significant reduction in the monetary penalty, which is the main incentive of our VSD policies," said John Sonderman, director of the Office of Export Enforcement (OEE) within the Commerce Department. The incident comes as the company anticipates $1.5 billion in CHIPS Act funding for manufacturing expansion. For comparison, the department previously fined Seagate $300 million in April 2023 for shipping $1.1 billion worth of drives to Huawei.
14 Comments on GlobalFoundries Faces $500,000 Sanction Fine, Risking Its $1.5 Billion in CHIPS Act Funding
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Here's a thought.... allocate/award the chips money, then withhold the fine amount & tell them they HAVE to make up the difference out of their own pockets BEFORE getting the CHIPS funds !
Remember, most anything electronic is powered by embedded general-purpose chips nowadays. There were reports of companies buying washing machines to strip for chips during the worst of the shortages.
Though I wonder for how long GlobalFoundries is going to just stay on DUV. At some point they might become redundant due to all the state-sponsored Chinese IC production. Even 12nm is apparently only being done in New York and Dresden.
The point of the small fines is so that these companies do actually report it, rather than try to cover it up.Speculation, if well-founded speculation.