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 firm didn't resort to getting the license. This fiasco isn't that large compared to what TSMC encountered, where it was reported that the firm has been supplying the essentials for Huawei's Ascend 910B AI chip, and the Taiwan giant defended this by stating that they were already in a client deal prior to when the sanctions hit in, back in 2020.
The US needs to strictly regulate its export policies and activities if they are eager to achieve its semiconductor ambitions, which includes strengthening the influence of China over global chip markets and establishing "in-house" production lines. Incentives such as the CHIPS Act, although has brought in formidable progress, yet it hasn't been able to achieve its "true" objective, despite a hefty portion of the financial capital being used up.
About the author: Muhammad Zuhair is a hardware and technology reporter for Wccftech, specializing in the semiconductor industry and the complex interplay between technology, manufacturing, and geopolitics. His coverage focuses on the corporate strategies and technological roadmaps of industry giants like TSMC, NVIDIA, Samsung, and Intel. Zuhair's expertise lies in deconstructing complex topics such as fabrication nodes (e.g., 2nm process), the economic impact of policies like the CHIPS Act, and the strategic development of AI infrastructure from NVIDIA, AMD and Intel.
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