vsd-cover-letter-bis.docx

1032-00007 · Client 1032 · Regulatory Filings

vsd-cover-letter-bis.docx DOCUMENT Litigation

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CALDERWOOD & HARKNESS LLP 1301 K Street NW, Suite 1100 Washington, D.C. 20005 Telephone: (202) 555-0100 Facsimile: (202) 555-0199 www.calderwoodharkness.com

November 4, 2025

VIA Severin Partners LLC AND ELECTRONIC SUBMISSION

Office of Export Enforcement Bureau of Industry and Security U.S. Department of Commerce 14th Street and Constitution Avenue NW Room H-4520 Washington, D.C. 20230

Re: Voluntary Self-Disclosure — Halcyon Semiconductor Inc. (EIN: 84-3921057) Potential Violations of 15 C.F.R. § 744.11 (Entity List Restrictions)

Dear Sir or Madam:

This firm represents Halcyon Semiconductor Inc. ("HSI"), a corporation organized and existing under the laws of the State of Delaware, with its principal place of business at 4700 Great America Parkway, Suite 300, San Jose, California 95054 (EIN: 84-3921057). We also represent HSI's parent company, Halcyon Semiconductor AG ("HSAG"), an Aktiengesellschaft organized under the laws of Switzerland, with its registered address at Bahnhofstrasse 42, 8001 Glenrock Assurance, Switzerland, and its principal operational office at Semperstrasse 15, 01069 Dresden, Germany. HSAG is a publicly listed company on the Frankfurt Stock Exchange (XETRA: HCA). Throughout this letter, HSI and HSAG are collectively referred to as the "Company."

We submit this letter as an initial voluntary self-disclosure ("VSD") on behalf of the Company pursuant to Section 764.5 of the Export Administration Regulations ("EAR"), 15 C.F.R. § 764.5. As set forth in detail below, the Company has identified three shipments of controlled semiconductor components to an entity on the Entity List (Supplement No. 4 to Part 744 of the EAR) that were made without the required Bureau of Industry and Security ("BIS") license. The Company is filing this initial VSD promptly upon completing a preliminary assessment of the relevant facts, and intends to file a supplemental narrative upon conclusion of its ongoing internal investigation. The Company is committed to full cooperation with the Office of Export Enforcement ("OEE") in connection with this matter.

I. SUMMARY

HSI has identified three (3) shipments of HCA-9100 series analog-to-digital converter ("ADC") chipsets that may constitute violations of the Entity List restrictions set forth in 15 C.F.R. § 744.11. The HCA-9100 series chipsets are classified under Export Control Classification Number ("ECCN") 3A001, which covers certain electronic components, including monolithic integrated circuits designed for analog-to-digital conversion. The HCA-9100 series are high-performance ADC chips capable of sampling rates exceeding 3.6 giga-samples per second ("Gsps"), with applications spanning civilian telecommunications infrastructure, industrial automation, scientific instrumentation, and defense-adjacent radar and electronic warfare systems. By reason of their technical parameters — particularly the sampling rate and effective number of bits — these components meet the control parameters specified under ECCN 3A001.a.5.a.

The three shipments were exported to Zhonghe Microelectronics Co., Ltd. ("Zhonghe"), a People's Republic of China ("PRC")-based entity headquartered at 12/F, Nanshan Digital Tower, Keji South Road, Nanshan District, Shenzhen 518057, PRC. Zhonghe was added to the Entity List (Supplement No. 4 to Part 744 of the EAR) on June 14, 2025, pursuant to a final rule published in the Federal Register at 90 Fed. Reg. 42118. The Entity List entry for Zhonghe specifies a license requirement for all items subject to the EAR, with a license review policy of presumption of denial.

All three of the shipments at issue occurred after the effective date of Zhonghe's Entity List addition. No BIS license was obtained for any of these shipments. HSI did not apply for a license for any of the three shipments, as the Company was unaware at the time of shipment that Zhonghe had been designated on the Entity List. Based on the Company's preliminary assessment, HSI believes that these three shipments may constitute violations of 15 C.F.R. § 744.11, which prohibits exports, reexports, and transfers (in-country) to entities on the Entity List without the required license.

II. DESCRIPTION OF THE TRANSACTIONS

A. Shipment Details

The following table summarizes the three shipments that are the subject of this VSD:

The aggregate value of the three shipments is $1,197,000. The total number of units shipped across the three transactions is 1,380 units. All three shipments involved the same product — the HCA-9100-A3, a variant of the HCA-9100 series analog-to-digital converter chipset — and followed the same supply chain routing described below.

B. Routing Details

All three shipments originated from HSAG's semiconductor fabrication facility ("Fab") located at Semperstrasse 15, 01069 Dresden, Germany. The Dresden Fab is HSAG's principal manufacturing site for the HCA-9100 series and related mixed-signal product lines. Finished semiconductor die and packaged components are manufactured, tested, and prepared for shipment at this facility.

From the Dresden facility, the HCA-9100-A3 units were consigned to Archipelago Component Solutions Pte. Ltd. ("Archipelago"), HSAG's authorized third-party distributor for the Asia-Pacific region. Archipelago is a private limited company incorporated in Singapore in 2016, with its registered office at 18 Boon Lay Way, #07-142 TradeHub 21, Singapore 609966. The Managing Director of Archipelago is Rajiv Sundaram. Archipelago has served as HSAG's exclusive Asia-Pacific distribution partner for HSAG's mixed-signal product lines, including the HCA-9100 series, since 2018, pursuant to a Distribution Agreement dated March 1, 2018, as amended.

Under this distribution arrangement, Archipelago received inventory shipments from the Dresden facility, warehoused the products in its Singapore facility, processed customer orders, managed export documentation and end-user certificates, and arranged onward shipment to end customers throughout the Asia-Pacific region. Archipelago was contractually responsible under the Distribution Agreement (Section 7.2) for ensuring compliance with all applicable export control laws and regulations, including the EAR, in connection with re-exports from Singapore to final destinations.

For each of the three shipments at issue, Archipelago processed the export documentation, obtained end-user certificates from Zhonghe, and arranged for re-export from Singapore to Zhonghe's facility at 12/F, Nanshan Digital Tower, Keji South Road, Nanshan District, Shenzhen 518057, PRC. The shipments were transported via air freight, with customs clearance handled by Archipelago's freight forwarding agent in Singapore and by Zhonghe's customs broker in Shenzhen.

C. Context of Prior Shipments

Prior to Zhonghe's addition to the Entity List on June 14, 2025, HSI and HSAG had maintained a lawful commercial relationship with Zhonghe. Between March 12, 2024 and May 2025, the Company completed eight (8) shipments of HCA-9100 series components to Zhonghe through the same supply chain routing (Dresden Fab to Archipelago in Singapore, then re-exported to Zhonghe in Shenzhen). These eight pre-listing shipments were not in violation of the EAR, as Zhonghe was not subject to Entity List restrictions during that period and no other license requirements were applicable.

Zhonghe's nominal business, as represented to the Company and Archipelago in end-use statements and during customer onboarding, is the design and manufacture of civilian telecommunications equipment, including base station components and network infrastructure hardware for PRC domestic telecommunications carriers.

In total, the Company completed eleven (11) shipments to Zhonghe with an aggregate value of approximately $4.41 million. Of these, the three post-listing shipments valued at $1,197,000 are the subject of this VSD. The eight pre-listing shipments, while not believed to constitute EAR violations, are being reviewed as part of the Company's broader internal investigation and are also encompassed within the scope of a related government inquiry described in Section V below.

III. CIRCUMSTANCES OF THE VIOLATIONS

A. Entity List Addition of Zhonghe Microelectronics Co., Ltd.

On June 14, 2025, BIS published a final rule in the Federal Register (90 Fed. Reg. 42118) adding Zhonghe Microelectronics Co., Ltd. to the Entity List under the destination of China (People's Republic of). The final rule specified that a license is required for all items subject to the EAR when destined for Zhonghe, and that applications for such licenses will be reviewed under a policy of presumption of denial. The final rule was effective upon publication in the Federal Register on June 14, 2025.

Prior to the effective date of this designation, Zhonghe was not listed on the Entity List or any other restricted party list maintained by BIS, and the Company's prior shipments to Zhonghe through the same routing were not in violation of the EAR or any other applicable export control regulation. The Company is not aware of any advance notice or proposed rulemaking that would have alerted it to the forthcoming Entity List addition prior to June 14, 2025.

B. Root Cause Analysis

The Company's internal investigation, though still in its early stages, has identified three interrelated root causes that, acting in combination, resulted in the failure to prevent the three post-listing shipments. Each root cause is described in detail below.

1. Sentinel Database Update Delay (Affecting All Three Shipments). Archipelago relies on a third-party restricted-party screening vendor, Sentinel Compliance Data Services Ltd. ("Sentinel"), for automated screening of all customers, consignees, and end users against applicable restricted party lists, including the BIS Entity List, the Specially Designated Nationals and blocked Persons List ("SDN List"), the Denied Persons List, and the Unverified List. Sentinel is a private limited company organized under the laws of the United Kingdom, with its registered office at 14 Queen Street, Edinburgh EH2 1JE, United Kingdom. Sentinel provides a cloud-based screening platform that integrates with Archipelago's order management system to perform real-time screening at the point of order entry.

Under the Master Services Agreement between Archipelago and Sentinel, dated February 15, 2020 (the "Sentinel MSA"), Section 4.3 ("Data Currency"), Sentinel is obligated to push updated restricted party list data to its subscribers' screening systems "within five (5) business days of publication" of any addition, modification, or removal from any covered regulatory list, including the BIS Entity List. This contractual commitment is a material element of the screening service and was a key factor in Archipelago's decision to engage Sentinel as its screening vendor.

Zhonghe Microelectronics Co., Ltd. was added to the Entity List on June 14, 2025, which fell on a Saturday. Under the Sentinel MSA, the five-business-day clock would have commenced on the next business day, Monday, June 16, 2025, and would have expired on Friday, June 20, 2025.

However, Sentinel did not push the updated Entity List data — including the entry for Zhonghe — to Archipelago's screening system until June 26, 2025. This represents a delay of twelve (12) calendar days and nine (9) business days from the date of publication, which exceeded Sentinel's contractual service-level agreement by four (4) business days. The cause of Sentinel's delay has not yet been fully determined, but preliminary information from Sentinel indicates that an internal processing error delayed the ingestion and validation of the June 14, 2025 Entity List update.

This database update delay meant that, for the period from June 14 through June 25, 2025, Archipelago's automated screening system did not contain the Zhonghe Entity List entry and was therefore incapable of flagging Zhonghe as a restricted party.

2. Absence of Re-Screening at Ship-Confirm Stage (Affecting Shipment No. 1 — June 27, 2025). The purchase order for the first post-listing shipment (Shipment No. 1) was entered into Archipelago's order management system on June 10, 2025 — four days before Zhonghe's addition to the Entity List. At the time of order entry, Archipelago's automated restricted-party screening, powered by Sentinel's database, performed a screening of the customer name and address against all applicable restricted party lists. The screening returned a result of "CLEAR" on June 10, 2025. This was a correct result at the time, as Zhonghe was not yet a designated entity on the Entity List.

The order was subsequently reviewed and pre-approved by Archipelago's compliance officer on June 13, 2025 — one day before the Entity List addition became effective. The compliance officer's review encompassed a verification of the screening result, a review of the end-use statement, and a confirmation that no red flags were present. The pre-approval was entered into the order management system, which flagged the order as cleared for shipment.

Critically, Archipelago's order management system did not perform a re-screening of the customer at the ship-confirm stage — that is, at the point when the physical shipment was authorized and released from the warehouse. The system was configured to treat a pre-approved order as fully cleared and to allow it to proceed to shipment without further screening, regardless of the elapsed time between pre-approval and actual shipment or any intervening changes to applicable restricted party lists.

Even though Sentinel pushed the updated Entity List data to Archipelago's system on June 26, 2025 — one day before Shipment No. 1 was confirmed — the shipment was not flagged because the order had already received pre-approval on June 13, 2025. The system allowed the pre-approved order to proceed to shipment without re-screening. Shipment No. 1 was confirmed and released from Archipelago's Singapore warehouse on June 27, 2025, based on the June 13 pre-approval, without any further screening against the updated restricted party list data.

The absence of a re-screening protocol at the ship-confirm stage represents a significant gap in Archipelago's export compliance procedures. Industry best practices, as reflected in BIS's guidance on export compliance programs, call for screening at multiple points in the order lifecycle, including at order entry, at any point when order details change, and at the point of shipment.

3. Character-Encoding and Name-Matching Mismatch (Affecting Shipments No. 2 and No. 3 — July 15 and August 3, 2025). The second and third post-listing shipments (Shipment No. 2 and Shipment No. 3) involved new purchase orders that were entered into Archipelago's order management system on July 8, 2025 and July 28, 2025, respectively. Both of these dates fall well after the June 26, 2025 Sentinel database update that added Zhonghe to the screening database. Accordingly, both orders should have been flagged by the automated screening system as involving a designated Entity List party.

However, the automated screening returned a result of "CLEAR" for both orders. The Company's investigation has determined that this false-negative result was caused by a character-encoding and name-matching deficiency in the configuration of Archipelago's order management system and its integration with the Sentinel screening module.

Specifically, the Sentinel database update included Zhonghe's entry using the romanized (Latin-alphabet) name: "Zhonghe Microelectronics Co., Ltd." The Entity List entry also included the address in English. The Sentinel database update did not include the simplified Chinese characters for Zhonghe's name: 中和微电子有限公司.

Archipelago's order management system stored Zhonghe's customer account record with the simplified Chinese characters (中和微电子有限公司) as the primary identifier in the account name field. The romanized name, "Zhonghe Microelectronics Co., Ltd.," was stored in a secondary alias field.

The Sentinel screening module, as configured within Archipelago's order management system, performed Entity List screening by matching the Entity List entries against the primary identifier field of the customer account record. It did not search the alias field for Entity List matches. This configuration deficiency meant that the screening module compared the romanized Entity List entry against the Chinese-character primary identifier and found no match, while the romanized alias field — which would have matched — was not included in the search scope.

As a result, the automated screening failed to identify Zhonghe as an Entity List party for either the July 8 or July 28 purchase orders, and both orders were processed and shipped without any compliance hold or escalation.

This character-encoding and name-matching issue was not identified until HSI's internal compliance review in September 2025, as described in Section IV below.

C. HSI's Own Screening Gaps

In addition to the failures at the Archipelago and Sentinel levels described above, the Company's preliminary investigation has identified deficiencies in HSI's own internal trade compliance procedures that contributed to the violations.

HSI's internal compliance screening of customers and end users was conducted at the time of initial customer onboarding. When Zhonghe was first onboarded as a customer in early 2024, HSI performed restricted-party screening and end-use diligence, which returned no adverse results. However, HSI's compliance procedures at the time did not require periodic or ongoing re-screening of existing customer accounts against updated restricted party lists. Accordingly, when Zhonghe was added to the Entity List on June 14, 2025, HSI's internal records were not updated to reflect the new restriction.

Furthermore, during the period relevant to this VSD, HSI did not independently monitor Entity List additions in real time. HSI's trade compliance team reviewed BIS regulatory updates on a periodic basis — typically monthly — but did not have an automated system or process for immediate identification and dissemination of new Entity List designations.

Finally, HSI's compliance function relied on Archipelago's screening processes — including Archipelago's use of the Sentinel screening service — for all Asia-Pacific distribution transactions routed through Archipelago. While the Distribution Agreement imposed compliance obligations on Archipelago, HSI did not independently verify or audit Archipelago's screening procedures, screening results, or the currency of Archipelago's restricted party list data during the relevant period.

The Company acknowledges that these gaps in HSI's own compliance infrastructure, while not the direct proximate cause of the shipments, contributed to the Company's failure to detect and prevent the post-listing shipments to Zhonghe.

IV. DISCOVERY AND REMEDIAL ACTIONS

A. Discovery of the Potential Violations

The potential violations were discovered by Janet Liang, Trade Compliance Analyst at HSI, during a routine quarterly compliance review conducted in September 2025. Ms. Liang's review involved a reconciliation of recent shipments against current restricted party list data, including the most recent Entity List updates. During this reconciliation, Ms. Liang identified the discrepancy between the effective date of Zhonghe's Entity List designation (June 14, 2025) and the dates of the three post-listing shipments (June 27, July 15, and August 3, 2025).

Upon identifying this discrepancy, Ms. Liang promptly escalated the matter to her direct supervisor and, within the same business day, to Annika Brauer, Head of Trade Compliance at HSAG in Dresden, and to Pamela Neuhaus, Vice President of Regulatory Affairs at HSI in San Jose. Ms. Brauer and Ms. Neuhaus initiated a preliminary fact-gathering review, which confirmed that the three post-listing shipments had been completed without a BIS license and that Zhonghe had been on the Entity List at the time of each shipment. Following this preliminary confirmation, the Company determined that a voluntary self-disclosure to BIS and engagement of outside counsel were warranted.

B. Immediate Remedial Steps

Upon discovery of the potential violations, the Company took the following immediate remedial actions:

(a) Halt of All Shipments to Zhonghe. Effective September 18, 2025, the Company issued a directive halting all further shipments to Zhonghe Microelectronics Co., Ltd. from any facility, distributor, or affiliate worldwide. Archipelago was instructed to cancel any open purchase orders from Zhonghe and to place a permanent block on Zhonghe's account in the order management system. No further shipments to Zhonghe have been made since September 18, 2025.

(b) Engagement of Outside Counsel. The Company retained Calderwood & Harkness LLP to conduct a privileged internal investigation into the circumstances of the potential violations and to advise the Company on its regulatory obligations, including the preparation and filing of this VSD. The engagement is led by Howard Quinn, Partner (Responsible Partner), and Conrad Ashby, Partner (Billing Partner), with Liam Donahue, Associate (Lead Associate), and Steven Hollander, Associate (Working Associate), serving as the primary working team. The engagement letter was executed on October 11, 2025.

(c) Engagement of Independent Compliance Consultant. The Company engaged Ashford Pennington LLC, an independent export-controls and sanctions compliance consultancy, to conduct a comprehensive independent review of the Company's export compliance program, including the programs maintained by HSAG, HSI, and Archipelago. Ashford Pennington is headquartered at 2000 M Street NW, Suite 750, Washington, D.C. 20036, and the engagement is led by Dr. Miriam Hecht, Principal Consultant. The engagement became effective on October 22, 2025. The Phase I assessment — encompassing a gap analysis of the Company's export compliance program, a review of the Company's restricted-party screening infrastructure, and an evaluation of the Company's oversight of third-party distributors — is being conducted on a fixed-fee basis of $475,000. A Phase II engagement, encompassing implementation of recommended enhancements, is anticipated to follow.

(d) Emergency Manual Screening Procedures. Pending completion of the system enhancements described below, the Company implemented emergency manual screening procedures for all pending and new orders destined for the PRC, effective immediately upon discovery. Under these procedures, all PRC-destined orders are manually screened by HSI's trade compliance team against the current BIS Entity List, Denied Persons List, Unverified List, and Military End-User List, as well as the OFAC SDN List and Sectoral Sanctions Identifications List, prior to approval. These manual procedures supplement, and do not replace, the automated screening conducted by Archipelago and Sentinel.

(e) Ship-Confirm Re-Screening Directive. The Company issued a directive to Archipelago requiring the immediate implementation of re-screening at the ship-confirm stage for all orders, regardless of prior approval status. Under this directive, no shipment may be released from Archipelago's warehouse without a current, same-day screening result confirming that the customer, consignee, and end user are not on any applicable restricted party list. Archipelago confirmed implementation of this re-screening procedure on October 1, 2025.

(f) Notification to Sentinel. The Company, through Archipelago, notified Sentinel Compliance Data Services Ltd. of the SLA breach and the resulting compliance failures. The Company demanded that Sentinel provide a written root-cause analysis of the database update delay and implement corrective measures to prevent recurrence. Sentinel has acknowledged the SLA breach and has indicated that it is conducting an internal review. The Company has reserved all contractual rights and remedies under the Sentinel MSA.

(g) Contractual and System Configuration Review. The Company initiated a comprehensive review of the contractual arrangement between Archipelago and Sentinel, including the database-update SLA and its enforcement mechanisms. In addition, the Company directed Archipelago to engage its IT team and the Sentinel integration support team to audit and remediate the character-encoding and name-matching configuration deficiency that prevented the Sentinel screening module from matching Entity List entries stored in romanized text against customer account records stored in simplified Chinese characters. The Company has directed that the screening module be reconfigured to match against all identifier fields — including primary names, alias names, and names in all character sets — for all restricted party list checks.

The Company intends to implement additional long-term remedial measures informed by the findings and recommendations of the Ashford Pennington Phase I compliance assessment and the Company's internal investigation. These additional measures will be described in detail in the supplemental disclosure.

V. RELATED GOVERNMENT INQUIRY

The Company wishes to bring to OEE's attention a related government inquiry that is currently pending. The U.S. Department of Justice, National Security Division, Counterintelligence and Export Control Section ("DOJ NSD/CES"), has issued a voluntary request for information to HSI, dated October 9, 2025, bearing reference number NSD-CES-2025-04871.

The DOJ inquiry encompasses the same three post-listing shipments to Zhonghe that are addressed in this VSD, as well as additional transactions that extend beyond the scope of this initial disclosure. Specifically, the DOJ request covers:

• The three post-listing shipments to Zhonghe Microelectronics Co., Ltd. (Shenzhen, PRC) that are the subject of this VSD (June 27, July 15, and August 3, 2025; aggregate value $1,197,000);

• Eight (8) pre-Entity-List shipments to Zhonghe Microelectronics Co., Ltd. (Shenzhen, PRC) completed between March 2024 and May 2025; and

• Six (6) shipments to Lansheng Harborline Technologies Technologies Ltd. (Chengdu, PRC), the dates and circumstances of which are under review as part of the Company's internal investigation.

In total, the DOJ inquiry encompasses seventeen (17) shipments with an aggregate value of approximately $6.83 million. The lead Assistant United States Attorney ("AUSA") on the matter is Adrienne Kolb, Senior Trial Attorney, supported by Trial Attorney Jonathan Weir, both of the Counterintelligence and Export Control Section of the National Security Division.

HSI is cooperating fully with the DOJ inquiry through its counsel, Calderwood & Harkness LLP. Calderwood & Harkness entered its appearance on behalf of HSI on October 14, 2025, and held an initial conference call with AUSA Kolb and Trial Attorney Weir on that date to discuss the scope and logistics of the Company's cooperation. The Company is in the process of collecting and reviewing responsive documents and information in connection with the DOJ request.

The Company intends to cooperate fully with both the BIS Office of Export Enforcement and DOJ NSD/CES in connection with all aspects of these matters. The Company respectfully requests that OEE coordinate with DOJ NSD/CES as appropriate to ensure efficient and consistent handling of the overlapping inquiries.

VI. PRELIMINARY ASSESSMENT OF KNOWLEDGE AND INTENT

Based on the information gathered to date in the early stages of the Company's internal investigation, the Company believes that the three post-listing shipments to Zhonghe resulted from systemic process and technology failures, and not from intentional, willful, or knowing conduct on the part of any individual or entity.

No evidence has been identified to date suggesting that any employee, officer, or agent of HSAG, HSI, or Archipelago knowingly shipped items to an Entity Listed party after the effective date of Zhonghe's designation. To the contrary, the available evidence indicates that the individuals involved in processing and approving the three shipments were unaware that Zhonghe had been added to the Entity List and believed in good faith that the shipments were permissible.

As described in Section III above, the root causes of the violations are systemic and technical in nature:

(1) The Sentinel database update delay, which exceeded the contractual SLA by four business days and left Archipelago's screening system without current Entity List data during a critical window;

(2) The absence of a re-screening protocol at the ship-confirm stage for pre-approved orders, which allowed the first shipment to proceed based on a stale screening result despite the intervening Entity List addition; and

(3) The character-encoding and name-matching configuration deficiency, which prevented the Sentinel screening module from correctly matching the romanized Entity List entry against customer records stored in simplified Chinese characters, causing the second and third shipments to clear screening despite the presence of updated data in the system.

Each of these root causes reflects a deficiency in compliance processes, systems, or oversight — not a deliberate decision to circumvent export control requirements. The Company's preliminary assessment is that the violations were the product of negligence and system inadequacy rather than intent.

The Company's internal investigation is ongoing, and the Company reserves the right to update or revise this assessment in the supplemental disclosure to the extent that additional facts or evidence come to light. The Company will promptly notify OEE if the investigation reveals any evidence inconsistent with the foregoing assessment.

VII. SUPPLEMENTAL DISCLOSURE

This initial VSD is intended to provide the Office of Export Enforcement with prompt notification of the potential violations, consistent with the timing expectations set forth in 15 C.F.R. § 764.5(c)(1) and the Company's commitment to transparency and full cooperation with BIS. The Company recognizes that this initial disclosure provides a preliminary account of the relevant facts and circumstances, and that additional information will be necessary for OEE to conduct a full evaluation of the matter.

A supplemental narrative will be submitted upon completion of the Company's internal investigation, which is being conducted under the direction of Calderwood & Harkness LLP with the assistance of Ashford Pennington LLC. Based on the current scope of the investigation and the volume of documents and data under review, the Company currently anticipates that the supplemental narrative will be ready for submission by late January 2026. The Company will promptly notify OEE if this timeline changes.

The supplemental narrative will include, at a minimum, the following:

(a) Complete documentation of the three shipments, including copies of purchase orders, commercial invoices, packing lists, bills of lading and airway bills, end-user certificates and statements, and restricted-party screening logs for each transaction;

(b) Detailed results of the internal investigation, including summaries of witness interviews conducted by counsel, a description of the document review methodology and findings, and a timeline of the events leading to each shipment;

(c) A comprehensive description of the remedial measures being implemented by the Company, including the findings and recommendations of the Ashford Pennington Phase I compliance assessment, a description of system enhancements and process changes, and a revised export compliance program framework; and

(d) An updated assessment of the scope and nature of the violations, including any additional information relevant to the factors set forth in 15 C.F.R. Part 766, Supplement No. 1 (Guidance on Charging and Penalty Determinations in Settlement of Administrative Enforcement Cases).

The Company will cooperate with any requests from OEE for additional information, documentation, or access to personnel in connection with OEE's review of this matter.

VIII. CONTACT INFORMATION

All communications regarding this Voluntary Self-Disclosure — including all correspondence, requests for information, subpoenas, and scheduling matters — should be directed to the undersigned counsel for the Company:

Howard Quinn, Partner Calderwood & Harkness LLP 1301 K Street NW, Suite 1100 Washington, D.C. 20005 Telephone: (202) 555-0147 Facsimile: (202) 555-0199

Email: hquinn@calderwoodharkness.com

The Company respectfully requests that OEE acknowledge receipt of this VSD and assign a reference number for tracking purposes. For the convenience of OEE, the Company has provisionally referenced this matter as OEE-VSD-2025-00319, subject to confirmation or reassignment by OEE upon receipt.

The Company appreciates the Office of Export Enforcement's attention to this matter and reiterates its commitment to full transparency, cooperation, and remediation. The Company takes its export control obligations seriously and deeply regrets the compliance failures described in this disclosure. The Company looks forward to working with OEE to resolve this matter in a manner consistent with the interests of national security and the integrity of the U.S. export control system.

Respectfully submitted,

CALDERWOOD & HARKNESS LLP

By: ________

Howard Quinn Partner

Date: November 4, 2025

cc: Marcus Friedl, General Counsel, Halcyon Semiconductor AG (via privileged email) Pamela Neuhaus, VP Regulatory Affairs, Halcyon Semiconductor Inc. (via privileged email)

Shipment No.	Date of Shipment	Value (USD)	Description
1	June 27, 2025	$412,000	480 units, HCA-9100-A3, shipped from Archipelago Component Solutions Pte. Ltd. (Singapore) to Zhonghe Microelectronics Co., Ltd. (Shenzhen, PRC)
2	July 15, 2025	$387,000	440 units, HCA-9100-A3, shipped from Archipelago Component Solutions Pte. Ltd. (Singapore) to Zhonghe Microelectronics Co., Ltd. (Shenzhen, PRC)
3	August 3, 2025	$398,000	460 units, HCA-9100-A3, shipped from Archipelago Component Solutions Pte. Ltd. (Singapore) to Zhonghe Microelectronics Co., Ltd. (Shenzhen, PRC)

CALDERWOOD & HARKNESS LLP 1301 K Street NW, Suite 1100 Washington, D.C. 20005 Telephone: (202) 555-0100 Facsimile: (202) 555-0199 www.calderwoodharkness.com
November 4, 2025
VIA Severin Partners LLC AND ELECTRONIC SUBMISSION
Office of Export Enforcement Bureau of Industry and Security U.S. Department of Commerce 14th Street and Constitution Avenue NW Room H-4520 Washington, D.C. 20230
Re: Voluntary Self-Disclosure — Halcyon Semiconductor Inc. (EIN: 84-3921057) Potential Violations of 15 C.F.R. § 744.11 (Entity List Restrictions)
Dear Sir or Madam:
This firm represents Halcyon Semiconductor Inc. ("HSI"), a corporation organized and existing under the laws of the State of Delaware, with its principal place of business at 4700 Great America Parkway, Suite 300, San Jose, California 95054 (EIN: 84-3921057). We also represent HSI's parent company, Halcyon Semiconductor AG ("HSAG"), an Aktiengesellschaft organized under the laws of Switzerland, with its registered address at Bahnhofstrasse 42, 8001 Glenrock Assurance, Switzerland, and its principal operational office at Semperstrasse 15, 01069 Dresden, Germany. HSAG is a publicly listed company on the Frankfurt Stock Exchange (XETRA: HCA). Throughout this letter, HSI and HSAG are collectively referred to as the "Company."
We submit this letter as an initial voluntary self-disclosure ("VSD") on behalf of the Company pursuant to Section 764.5 of the Export Administration Regulations ("EAR"), 15 C.F.R. § 764.5. As set forth in detail below, the Company has identified three shipments of controlled semiconductor components to an entity on the Entity List (Supplement No. 4 to Part 744 of the EAR) that were made without the required Bureau of Industry and Security ("BIS") license. The Company is filing this initial VSD promptly upon completing a preliminary assessment of the relevant facts, and intends to file a supplemental narrative upon conclusion of its ongoing internal investigation. The Company is committed to full cooperation with the Office of Export Enforcement ("OEE") in connection with this matter.
I. SUMMARY
HSI has identified three (3) shipments of HCA-9100 series analog-to-digital converter ("ADC") chipsets that may constitute violations of the Entity List restrictions set forth in 15 C.F.R. § 744.11. The HCA-9100 series chipsets are classified under Export Control Classification Number ("ECCN") 3A001, which covers certain electronic components, including monolithic integrated circuits designed for analog-to-digital conversion. The HCA-9100 series are high-performance ADC chips capable of sampling rates exceeding 3.6 giga-samples per second ("Gsps"), with applications spanning civilian telecommunications infrastructure, industrial automation, scientific instrumentation, and defense-adjacent radar and electronic warfare systems. By reason of their technical parameters — particularly the sampling rate and effective number of bits — these components meet the control parameters specified under ECCN 3A001.a.5.a.
The three shipments were exported to Zhonghe Microelectronics Co., Ltd. ("Zhonghe"), a People's Republic of China ("PRC")-based entity headquartered at 12/F, Nanshan Digital Tower, Keji South Road, Nanshan District, Shenzhen 518057, PRC. Zhonghe was added to the Entity List (Supplement No. 4 to Part 744 of the EAR) on June 14, 2025, pursuant to a final rule published in the Federal Register at 90 Fed. Reg. 42118. The Entity List entry for Zhonghe specifies a license requirement for all items subject to the EAR, with a license review policy of presumption of denial.
All three of the shipments at issue occurred after the effective date of Zhonghe's Entity List addition. No BIS license was obtained for any of these shipments. HSI did not apply for a license for any of the three shipments, as the Company was unaware at the time of shipment that Zhonghe had been designated on the Entity List. Based on the Company's preliminary assessment, HSI believes that these three shipments may constitute violations of 15 C.F.R. § 744.11, which prohibits exports, reexports, and transfers (in-country) to entities on the Entity List without the required license.
II. DESCRIPTION OF THE TRANSACTIONS
A. Shipment Details
The following table summarizes the three shipments that are the subject of this VSD:
The aggregate value of the three shipments is $1,197,000. The total number of units shipped across the three transactions is 1,380 units. All three shipments involved the same product — the HCA-9100-A3, a variant of the HCA-9100 series analog-to-digital converter chipset — and followed the same supply chain routing described below.
B. Routing Details
All three shipments originated from HSAG's semiconductor fabrication facility ("Fab") located at Semperstrasse 15, 01069 Dresden, Germany. The Dresden Fab is HSAG's principal manufacturing site for the HCA-9100 series and related mixed-signal product lines. Finished semiconductor die and packaged components are manufactured, tested, and prepared for shipment at this facility.
From the Dresden facility, the HCA-9100-A3 units were consigned to Archipelago Component Solutions Pte. Ltd. ("Archipelago"), HSAG's authorized third-party distributor for the Asia-Pacific region. Archipelago is a private limited company incorporated in Singapore in 2016, with its registered office at 18 Boon Lay Way, #07-142 TradeHub 21, Singapore 609966. The Managing Director of Archipelago is Rajiv Sundaram. Archipelago has served as HSAG's exclusive Asia-Pacific distribution partner for HSAG's mixed-signal product lines, including the HCA-9100 series, since 2018, pursuant to a Distribution Agreement dated March 1, 2018, as amended.
Under this distribution arrangement, Archipelago received inventory shipments from the Dresden facility, warehoused the products in its Singapore facility, processed customer orders, managed export documentation and end-user certificates, and arranged onward shipment to end customers throughout the Asia-Pacific region. Archipelago was contractually responsible under the Distribution Agreement (Section 7.2) for ensuring compliance with all applicable export control laws and regulations, including the EAR, in connection with re-exports from Singapore to final destinations.
For each of the three shipments at issue, Archipelago processed the export documentation, obtained end-user certificates from Zhonghe, and arranged for re-export from Singapore to Zhonghe's facility at 12/F, Nanshan Digital Tower, Keji South Road, Nanshan District, Shenzhen 518057, PRC. The shipments were transported via air freight, with customs clearance handled by Archipelago's freight forwarding agent in Singapore and by Zhonghe's customs broker in Shenzhen.
C. Context of Prior Shipments
Prior to Zhonghe's addition to the Entity List on June 14, 2025, HSI and HSAG had maintained a lawful commercial relationship with Zhonghe. Between March 12, 2024 and May 2025, the Company completed eight (8) shipments of HCA-9100 series components to Zhonghe through the same supply chain routing (Dresden Fab to Archipelago in Singapore, then re-exported to Zhonghe in Shenzhen). These eight pre-listing shipments were not in violation of the EAR, as Zhonghe was not subject to Entity List restrictions during that period and no other license requirements were applicable.
Zhonghe's nominal business, as represented to the Company and Archipelago in end-use statements and during customer onboarding, is the design and manufacture of civilian telecommunications equipment, including base station components and network infrastructure hardware for PRC domestic telecommunications carriers.
In total, the Company completed eleven (11) shipments to Zhonghe with an aggregate value of approximately $4.41 million. Of these, the three post-listing shipments valued at $1,197,000 are the subject of this VSD. The eight pre-listing shipments, while not believed to constitute EAR violations, are being reviewed as part of the Company's broader internal investigation and are also encompassed within the scope of a related government inquiry described in Section V below.
III. CIRCUMSTANCES OF THE VIOLATIONS
A. Entity List Addition of Zhonghe Microelectronics Co., Ltd.
On June 14, 2025, BIS published a final rule in the Federal Register (90 Fed. Reg. 42118) adding Zhonghe Microelectronics Co., Ltd. to the Entity List under the destination of China (People's Republic of). The final rule specified that a license is required for all items subject to the EAR when destined for Zhonghe, and that applications for such licenses will be reviewed under a policy of presumption of denial. The final rule was effective upon publication in the Federal Register on June 14, 2025.
Prior to the effective date of this designation, Zhonghe was not listed on the Entity List or any other restricted party list maintained by BIS, and the Company's prior shipments to Zhonghe through the same routing were not in violation of the EAR or any other applicable export control regulation. The Company is not aware of any advance notice or proposed rulemaking that would have alerted it to the forthcoming Entity List addition prior to June 14, 2025.
B. Root Cause Analysis
The Company's internal investigation, though still in its early stages, has identified three interrelated root causes that, acting in combination, resulted in the failure to prevent the three post-listing shipments. Each root cause is described in detail below.
1. Sentinel Database Update Delay (Affecting All Three Shipments).  Archipelago relies on a third-party restricted-party screening vendor, Sentinel Compliance Data Services Ltd. ("Sentinel"), for automated screening of all customers, consignees, and end users against applicable restricted party lists, including the BIS Entity List, the Specially Designated Nationals and blocked Persons List ("SDN List"), the Denied Persons List, and the Unverified List. Sentinel is a private limited company organized under the laws of the United Kingdom, with its registered office at 14 Queen Street, Edinburgh EH2 1JE, United Kingdom. Sentinel provides a cloud-based screening platform that integrates with Archipelago's order management system to perform real-time screening at the point of order entry.
Under the Master Services Agreement between Archipelago and Sentinel, dated February 15, 2020 (the "Sentinel MSA"), Section 4.3 ("Data Currency"), Sentinel is obligated to push updated restricted party list data to its subscribers' screening systems "within five (5) business days of publication" of any addition, modification, or removal from any covered regulatory list, including the BIS Entity List. This contractual commitment is a material element of the screening service and was a key factor in Archipelago's decision to engage Sentinel as its screening vendor.
Zhonghe Microelectronics Co., Ltd. was added to the Entity List on June 14, 2025, which fell on a Saturday. Under the Sentinel MSA, the five-business-day clock would have commenced on the next business day, Monday, June 16, 2025, and would have expired on Friday, June 20, 2025.
However, Sentinel did not push the updated Entity List data — including the entry for Zhonghe — to Archipelago's screening system until June 26, 2025. This represents a delay of twelve (12) calendar days and nine (9) business days from the date of publication, which exceeded Sentinel's contractual service-level agreement by four (4) business days. The cause of Sentinel's delay has not yet been fully determined, but preliminary information from Sentinel indicates that an internal processing error delayed the ingestion and validation of the June 14, 2025 Entity List update.
This database update delay meant that, for the period from June 14 through June 25, 2025, Archipelago's automated screening system did not contain the Zhonghe Entity List entry and was therefore incapable of flagging Zhonghe as a restricted party.
2. Absence of Re-Screening at Ship-Confirm Stage (Affecting Shipment No. 1 — June 27, 2025).  The purchase order for the first post-listing shipment (Shipment No. 1) was entered into Archipelago's order management system on June 10, 2025 — four days before Zhonghe's addition to the Entity List. At the time of order entry, Archipelago's automated restricted-party screening, powered by Sentinel's database, performed a screening of the customer name and address against all applicable restricted party lists. The screening returned a result of "CLEAR" on June 10, 2025. This was a correct result at the time, as Zhonghe was not yet a designated entity on the Entity List.
The order was subsequently reviewed and pre-approved by Archipelago's compliance officer on June 13, 2025 — one day before the Entity List addition became effective. The compliance officer's review encompassed a verification of the screening result, a review of the end-use statement, and a confirmation that no red flags were present. The pre-approval was entered into the order management system, which flagged the order as cleared for shipment.
Critically, Archipelago's order management system did not perform a re-screening of the customer at the ship-confirm stage — that is, at the point when the physical shipment was authorized and released from the warehouse. The system was configured to treat a pre-approved order as fully cleared and to allow it to proceed to shipment without further screening, regardless of the elapsed time between pre-approval and actual shipment or any intervening changes to applicable restricted party lists.
Even though Sentinel pushed the updated Entity List data to Archipelago's system on June 26, 2025 — one day before Shipment No. 1 was confirmed — the shipment was not flagged because the order had already received pre-approval on June 13, 2025. The system allowed the pre-approved order to proceed to shipment without re-screening. Shipment No. 1 was confirmed and released from Archipelago's Singapore warehouse on June 27, 2025, based on the June 13 pre-approval, without any further screening against the updated restricted party list data.
The absence of a re-screening protocol at the ship-confirm stage represents a significant gap in Archipelago's export compliance procedures. Industry best practices, as reflected in BIS's guidance on export compliance programs, call for screening at multiple points in the order lifecycle, including at order entry, at any point when order details change, and at the point of shipment.
3. Character-Encoding and Name-Matching Mismatch (Affecting Shipments No. 2 and No. 3 — July 15 and August 3, 2025).  The second and third post-listing shipments (Shipment No. 2 and Shipment No. 3) involved new purchase orders that were entered into Archipelago's order management system on July 8, 2025 and July 28, 2025, respectively. Both of these dates fall well after the June 26, 2025 Sentinel database update that added Zhonghe to the screening database. Accordingly, both orders should have been flagged by the automated screening system as involving a designated Entity List party.
However, the automated screening returned a result of "CLEAR" for both orders. The Company's investigation has determined that this false-negative result was caused by a character-encoding and name-matching deficiency in the configuration of Archipelago's order management system and its integration with the Sentinel screening module.
Specifically, the Sentinel database update included Zhonghe's entry using the romanized (Latin-alphabet) name: "Zhonghe Microelectronics Co., Ltd." The Entity List entry also included the address in English. The Sentinel database update did not include the simplified Chinese characters for Zhonghe's name: 中和微电子有限公司.
Archipelago's order management system stored Zhonghe's customer account record with the simplified Chinese characters (中和微电子有限公司) as the primary identifier in the account name field. The romanized name, "Zhonghe Microelectronics Co., Ltd.," was stored in a secondary alias field.
The Sentinel screening module, as configured within Archipelago's order management system, performed Entity List screening by matching the Entity List entries against the primary identifier field of the customer account record. It did not search the alias field for Entity List matches. This configuration deficiency meant that the screening module compared the romanized Entity List entry against the Chinese-character primary identifier and found no match, while the romanized alias field — which would have matched — was not included in the search scope.
As a result, the automated screening failed to identify Zhonghe as an Entity List party for either the July 8 or July 28 purchase orders, and both orders were processed and shipped without any compliance hold or escalation.
This character-encoding and name-matching issue was not identified until HSI's internal compliance review in September 2025, as described in Section IV below.
C. HSI's Own Screening Gaps
In addition to the failures at the Archipelago and Sentinel levels described above, the Company's preliminary investigation has identified deficiencies in HSI's own internal trade compliance procedures that contributed to the violations.
HSI's internal compliance screening of customers and end users was conducted at the time of initial customer onboarding. When Zhonghe was first onboarded as a customer in early 2024, HSI performed restricted-party screening and end-use diligence, which returned no adverse results. However, HSI's compliance procedures at the time did not require periodic or ongoing re-screening of existing customer accounts against updated restricted party lists. Accordingly, when Zhonghe was added to the Entity List on June 14, 2025, HSI's internal records were not updated to reflect the new restriction.
Furthermore, during the period relevant to this VSD, HSI did not independently monitor Entity List additions in real time. HSI's trade compliance team reviewed BIS regulatory updates on a periodic basis — typically monthly — but did not have an automated system or process for immediate identification and dissemination of new Entity List designations.
Finally, HSI's compliance function relied on Archipelago's screening processes — including Archipelago's use of the Sentinel screening service — for all Asia-Pacific distribution transactions routed through Archipelago. While the Distribution Agreement imposed compliance obligations on Archipelago, HSI did not independently verify or audit Archipelago's screening procedures, screening results, or the currency of Archipelago's restricted party list data during the relevant period.
The Company acknowledges that these gaps in HSI's own compliance infrastructure, while not the direct proximate cause of the shipments, contributed to the Company's failure to detect and prevent the post-listing shipments to Zhonghe.
IV. DISCOVERY AND REMEDIAL ACTIONS
A. Discovery of the Potential Violations
The potential violations were discovered by Janet Liang, Trade Compliance Analyst at HSI, during a routine quarterly compliance review conducted in September 2025. Ms. Liang's review involved a reconciliation of recent shipments against current restricted party list data, including the most recent Entity List updates. During this reconciliation, Ms. Liang identified the discrepancy between the effective date of Zhonghe's Entity List designation (June 14, 2025) and the dates of the three post-listing shipments (June 27, July 15, and August 3, 2025).
Upon identifying this discrepancy, Ms. Liang promptly escalated the matter to her direct supervisor and, within the same business day, to Annika Brauer, Head of Trade Compliance at HSAG in Dresden, and to Pamela Neuhaus, Vice President of Regulatory Affairs at HSI in San Jose. Ms. Brauer and Ms. Neuhaus initiated a preliminary fact-gathering review, which confirmed that the three post-listing shipments had been completed without a BIS license and that Zhonghe had been on the Entity List at the time of each shipment. Following this preliminary confirmation, the Company determined that a voluntary self-disclosure to BIS and engagement of outside counsel were warranted.
B. Immediate Remedial Steps
Upon discovery of the potential violations, the Company took the following immediate remedial actions:
(a) Halt of All Shipments to Zhonghe. Effective September 18, 2025, the Company issued a directive halting all further shipments to Zhonghe Microelectronics Co., Ltd. from any facility, distributor, or affiliate worldwide. Archipelago was instructed to cancel any open purchase orders from Zhonghe and to place a permanent block on Zhonghe's account in the order management system. No further shipments to Zhonghe have been made since September 18, 2025.
(b) Engagement of Outside Counsel. The Company retained Calderwood & Harkness LLP to conduct a privileged internal investigation into the circumstances of the potential violations and to advise the Company on its regulatory obligations, including the preparation and filing of this VSD. The engagement is led by Howard Quinn, Partner (Responsible Partner), and Conrad Ashby, Partner (Billing Partner), with Liam Donahue, Associate (Lead Associate), and Steven Hollander, Associate (Working Associate), serving as the primary working team. The engagement letter was executed on October 11, 2025.
(c) Engagement of Independent Compliance Consultant. The Company engaged Ashford Pennington LLC, an independent export-controls and sanctions compliance consultancy, to conduct a comprehensive independent review of the Company's export compliance program, including the programs maintained by HSAG, HSI, and Archipelago. Ashford Pennington is headquartered at 2000 M Street NW, Suite 750, Washington, D.C. 20036, and the engagement is led by Dr. Miriam Hecht, Principal Consultant. The engagement became effective on October 22, 2025. The Phase I assessment — encompassing a gap analysis of the Company's export compliance program, a review of the Company's restricted-party screening infrastructure, and an evaluation of the Company's oversight of third-party distributors — is being conducted on a fixed-fee basis of $475,000. A Phase II engagement, encompassing implementation of recommended enhancements, is anticipated to follow.
(d) Emergency Manual Screening Procedures. Pending completion of the system enhancements described below, the Company implemented emergency manual screening procedures for all pending and new orders destined for the PRC, effective immediately upon discovery. Under these procedures, all PRC-destined orders are manually screened by HSI's trade compliance team against the current BIS Entity List, Denied Persons List, Unverified List, and Military End-User List, as well as the OFAC SDN List and Sectoral Sanctions Identifications List, prior to approval. These manual procedures supplement, and do not replace, the automated screening conducted by Archipelago and Sentinel.
(e) Ship-Confirm Re-Screening Directive. The Company issued a directive to Archipelago requiring the immediate implementation of re-screening at the ship-confirm stage for all orders, regardless of prior approval status. Under this directive, no shipment may be released from Archipelago's warehouse without a current, same-day screening result confirming that the customer, consignee, and end user are not on any applicable restricted party list. Archipelago confirmed implementation of this re-screening procedure on October 1, 2025.
(f) Notification to Sentinel. The Company, through Archipelago, notified Sentinel Compliance Data Services Ltd. of the SLA breach and the resulting compliance failures. The Company demanded that Sentinel provide a written root-cause analysis of the database update delay and implement corrective measures to prevent recurrence. Sentinel has acknowledged the SLA breach and has indicated that it is conducting an internal review. The Company has reserved all contractual rights and remedies under the Sentinel MSA.
(g) Contractual and System Configuration Review. The Company initiated a comprehensive review of the contractual arrangement between Archipelago and Sentinel, including the database-update SLA and its enforcement mechanisms. In addition, the Company directed Archipelago to engage its IT team and the Sentinel integration support team to audit and remediate the character-encoding and name-matching configuration deficiency that prevented the Sentinel screening module from matching Entity List entries stored in romanized text against customer account records stored in simplified Chinese characters. The Company has directed that the screening module be reconfigured to match against all identifier fields — including primary names, alias names, and names in all character sets — for all restricted party list checks.
The Company intends to implement additional long-term remedial measures informed by the findings and recommendations of the Ashford Pennington Phase I compliance assessment and the Company's internal investigation. These additional measures will be described in detail in the supplemental disclosure.
V. RELATED GOVERNMENT INQUIRY
The Company wishes to bring to OEE's attention a related government inquiry that is currently pending. The U.S. Department of Justice, National Security Division, Counterintelligence and Export Control Section ("DOJ NSD/CES"), has issued a voluntary request for information to HSI, dated October 9, 2025, bearing reference number NSD-CES-2025-04871.
The DOJ inquiry encompasses the same three post-listing shipments to Zhonghe that are addressed in this VSD, as well as additional transactions that extend beyond the scope of this initial disclosure. Specifically, the DOJ request covers:
•  The three post-listing shipments to Zhonghe Microelectronics Co., Ltd. (Shenzhen, PRC) that are the subject of this VSD (June 27, July 15, and August 3, 2025; aggregate value $1,197,000);
•  Eight (8) pre-Entity-List shipments to Zhonghe Microelectronics Co., Ltd. (Shenzhen, PRC) completed between March 2024 and May 2025; and
•  Six (6) shipments to Lansheng Harborline Technologies Technologies Ltd. (Chengdu, PRC), the dates and circumstances of which are under review as part of the Company's internal investigation.
In total, the DOJ inquiry encompasses seventeen (17) shipments with an aggregate value of approximately $6.83 million. The lead Assistant United States Attorney ("AUSA") on the matter is Adrienne Kolb, Senior Trial Attorney, supported by Trial Attorney Jonathan Weir, both of the Counterintelligence and Export Control Section of the National Security Division.
HSI is cooperating fully with the DOJ inquiry through its counsel, Calderwood & Harkness LLP. Calderwood & Harkness entered its appearance on behalf of HSI on October 14, 2025, and held an initial conference call with AUSA Kolb and Trial Attorney Weir on that date to discuss the scope and logistics of the Company's cooperation. The Company is in the process of collecting and reviewing responsive documents and information in connection with the DOJ request.
The Company intends to cooperate fully with both the BIS Office of Export Enforcement and DOJ NSD/CES in connection with all aspects of these matters. The Company respectfully requests that OEE coordinate with DOJ NSD/CES as appropriate to ensure efficient and consistent handling of the overlapping inquiries.
VI. PRELIMINARY ASSESSMENT OF KNOWLEDGE AND INTENT
Based on the information gathered to date in the early stages of the Company's internal investigation, the Company believes that the three post-listing shipments to Zhonghe resulted from systemic process and technology failures, and not from intentional, willful, or knowing conduct on the part of any individual or entity.
No evidence has been identified to date suggesting that any employee, officer, or agent of HSAG, HSI, or Archipelago knowingly shipped items to an Entity Listed party after the effective date of Zhonghe's designation. To the contrary, the available evidence indicates that the individuals involved in processing and approving the three shipments were unaware that Zhonghe had been added to the Entity List and believed in good faith that the shipments were permissible.
As described in Section III above, the root causes of the violations are systemic and technical in nature:
(1) The Sentinel database update delay, which exceeded the contractual SLA by four business days and left Archipelago's screening system without current Entity List data during a critical window;
(2) The absence of a re-screening protocol at the ship-confirm stage for pre-approved orders, which allowed the first shipment to proceed based on a stale screening result despite the intervening Entity List addition; and
(3) The character-encoding and name-matching configuration deficiency, which prevented the Sentinel screening module from correctly matching the romanized Entity List entry against customer records stored in simplified Chinese characters, causing the second and third shipments to clear screening despite the presence of updated data in the system.
Each of these root causes reflects a deficiency in compliance processes, systems, or oversight — not a deliberate decision to circumvent export control requirements. The Company's preliminary assessment is that the violations were the product of negligence and system inadequacy rather than intent.
The Company's internal investigation is ongoing, and the Company reserves the right to update or revise this assessment in the supplemental disclosure to the extent that additional facts or evidence come to light. The Company will promptly notify OEE if the investigation reveals any evidence inconsistent with the foregoing assessment.
VII. SUPPLEMENTAL DISCLOSURE
This initial VSD is intended to provide the Office of Export Enforcement with prompt notification of the potential violations, consistent with the timing expectations set forth in 15 C.F.R. § 764.5(c)(1) and the Company's commitment to transparency and full cooperation with BIS. The Company recognizes that this initial disclosure provides a preliminary account of the relevant facts and circumstances, and that additional information will be necessary for OEE to conduct a full evaluation of the matter.
A supplemental narrative will be submitted upon completion of the Company's internal investigation, which is being conducted under the direction of Calderwood & Harkness LLP with the assistance of Ashford Pennington LLC. Based on the current scope of the investigation and the volume of documents and data under review, the Company currently anticipates that the supplemental narrative will be ready for submission by late January 2026. The Company will promptly notify OEE if this timeline changes.
The supplemental narrative will include, at a minimum, the following:
(a) Complete documentation of the three shipments, including copies of purchase orders, commercial invoices, packing lists, bills of lading and airway bills, end-user certificates and statements, and restricted-party screening logs for each transaction;
(b) Detailed results of the internal investigation, including summaries of witness interviews conducted by counsel, a description of the document review methodology and findings, and a timeline of the events leading to each shipment;
(c) A comprehensive description of the remedial measures being implemented by the Company, including the findings and recommendations of the Ashford Pennington Phase I compliance assessment, a description of system enhancements and process changes, and a revised export compliance program framework; and
(d) An updated assessment of the scope and nature of the violations, including any additional information relevant to the factors set forth in 15 C.F.R. Part 766, Supplement No. 1 (Guidance on Charging and Penalty Determinations in Settlement of Administrative Enforcement Cases).
The Company will cooperate with any requests from OEE for additional information, documentation, or access to personnel in connection with OEE's review of this matter.
VIII. CONTACT INFORMATION
All communications regarding this Voluntary Self-Disclosure — including all correspondence, requests for information, subpoenas, and scheduling matters — should be directed to the undersigned counsel for the Company:
Howard Quinn, Partner Calderwood & Harkness LLP 1301 K Street NW, Suite 1100 Washington, D.C. 20005 Telephone: (202) 555-0147 Facsimile: (202) 555-0199
Email: hquinn@calderwoodharkness.com
The Company respectfully requests that OEE acknowledge receipt of this VSD and assign a reference number for tracking purposes. For the convenience of OEE, the Company has provisionally referenced this matter as OEE-VSD-2025-00319, subject to confirmation or reassignment by OEE upon receipt.
The Company appreciates the Office of Export Enforcement's attention to this matter and reiterates its commitment to full transparency, cooperation, and remediation. The Company takes its export control obligations seriously and deeply regrets the compliance failures described in this disclosure. The Company looks forward to working with OEE to resolve this matter in a manner consistent with the interests of national security and the integrity of the U.S. export control system.
Respectfully submitted,
CALDERWOOD & HARKNESS LLP
By: ________
Howard Quinn Partner
Date: November 4, 2025
cc: Marcus Friedl, General Counsel, Halcyon Semiconductor AG (via privileged email) Pamela Neuhaus, VP Regulatory Affairs, Halcyon Semiconductor Inc. (via privileged email)
Shipment No. | Date of Shipment | Value (USD) | Description
1 | June 27, 2025 | $412,000 | 480 units, HCA-9100-A3, shipped from Archipelago Component Solutions Pte. Ltd. (Singapore) to Zhonghe Microelectronics Co., Ltd. (Shenzhen, PRC)
2 | July 15, 2025 | $387,000 | 440 units, HCA-9100-A3, shipped from Archipelago Component Solutions Pte. Ltd. (Singapore) to Zhonghe Microelectronics Co., Ltd. (Shenzhen, PRC)
3 | August 3, 2025 | $398,000 | 460 units, HCA-9100-A3, shipped from Archipelago Component Solutions Pte. Ltd. (Singapore) to Zhonghe Microelectronics Co., Ltd. (Shenzhen, PRC)

I. SUMMARY

II. DESCRIPTION OF THE TRANSACTIONS

III. CIRCUMSTANCES OF THE VIOLATIONS

IV. DISCOVERY AND REMEDIAL ACTIONS

V. RELATED GOVERNMENT INQUIRY

VI. PRELIMINARY ASSESSMENT OF KNOWLEDGE AND INTENT

VII. SUPPLEMENTAL DISCLOSURE

VIII. CONTACT INFORMATION

CALDERWOOD & HARKNESS LLP

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