Nov 1 (Reuters) - The U.S. said on Friday it imposed a

$500,000 penalty on New York-based GlobalFoundries ( GFS ), the

world's third-largest contract chipmaker, for shipping chips

without authorization to an affiliate of blacklisted Chinese

chipmaker SMIC.

In a statement, the Commerce Department said GlobalFoundries ( GFS )

sent 74 shipments worth $17.1 million to SJ Semiconductor, an

affiliate of SMIC, without seeking a license. Both SMIC and SJ

Semiconductor were added to a trade restriction list in 2020

over SMIC's alleged ties to the Chinese military-industrial

complex. SMIC has denied wrongdoing.

Exports to firms on the list require a difficult-to-obtain

license, which GlobalFoundries ( GFS ) did not apply for, the department

said.

"We want U.S. companies to be hypervigilant when sending

semiconductor materials to Chinese parties," Assistant Secretary

for Export Enforcement Matthew Axelrod said in a statement.

SMIC, SJ Semiconductor and GlobalFoundries ( GFS ), which

voluntarily disclosed the violation and cooperated extensively

with the investigation, according to the Commerce Department,

did not immediately respond to requests for comment.

U.S. lawmakers have expressed concern that the Commerce

Department, which oversees export policy, may not be

aggressively enforcing its regulations as Washington seeks to

stop China receiving sensitive technology that could bolster

its military.

Influential Democratic Senator Mark Warner criticized 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, Reuters reported on Thursday.

GlobalFoundries ( GFS ), majority owned by Abu Dhabi's sovereign

wealth fund Mubadala Investment Co, is slated to receive around

$1.5 billion from the Commerce Department to build a new

semiconductor production facility in Malta, New York, and expand

existing operations there and in Burlington, Vermont.

The grant is part of a U.S. program to encourage chipmakers

to expand production in the United States.