TSMC Could Face Billions Of Fine For Developing Huawei AI Chip

The world’s largest semiconductor manufacturer TSMC could face a fine of billions in billions due to suspected violations of US export controls. The group is said to have produced at least part of a new Huawei AI processor.

Investigation runs

According to the matter, the Ministry of Trade is investigating whether TSMC has knowingly or unwittingly produced a chip for the Chinese company Sophgo reports, the news agency reports Reuters. This is said to have been used in the high-performance AI processor Ascend 910b from Huawei.

Huawei has been on a US trade restriction list for years that prohibits the export of goods with US technology to the company. Since TSMC’s manufacturing systems in Taiwan also contain US technology, they are subject to these export controls. A delivery of such chips to Huawei – directly or via middlemen such as Sophgo – could therefore have violated applicable regulations. The possible punishment is up to the double of the value of the objects complained about – which could correspond to a billion dollars in the present case.

According to the U.S. Think Tank Rand Research Center, TSMC produced almost three million chips with a design that corresponds to that of the Huawei-Ki unit. After the allegations became known, TSMC hired the deliveries to Sophgo and emphasized that since September 2020, he had no business with Huawei. The investigation against the order manufacturer was triggered, among other things, by an analysis of the Canadian company Techinight, which identified a component made by TSMC in a Huawei processor.

Washington threatens

The developments come at a politically sensitive time: the USA and Taiwan are at the beginning of new trade talks after Donald Trump recently imposed new import duties on goods from Taiwan. Semiconductors were excluded, but Trump announced that it also announced measures in this area. Neither the US Ministry of Trade nor TSMC wanted to comment on the status of the investigations.

However, a spokesman for the ministry emphasized that significantly stricter measures for export violations were to be expected in the future. In the past, sensitive punishments have already been imposed against other companies such as Seagate, which two years ago had to pay $300 million for deliveries to Huawei.