Taiwan Semiconductor Manufacturing Company (TSMC) is facing a potential fine exceeding $1 billion due to a U.S. export control investigation. This inquiry is linked to a chip manufactured by TSMC that was incorporated into a Huawei AI processor. As reported, the investigation stems from concerns surrounding the export of controlled technology to Huawei, a known entity in the Chinese tech landscape. A spokesperson for TSMC stated that the company is currently in a “quiet period” and did not provide further comments on the situation.
This investigation has unfolded since late 2024, involving not just TSMC and Huawei, but also Xiamen Sophgo Technologies, a Chinese chip design firm affiliated with Bitmain, known for Bitcoin mining equipment. In October 2024, reports indicated that significant amounts of TSMC’s export-controlled AI chip components were found in Huawei’s prominent AI accelerator, the Ascend 910B. The complexity arises from the manner in which TSMC’s chip reportedly integrates with Sophgo’s design, which is then embedded into Huawei’s processor. This development has drawn scrutiny not just because of regulatory compliance, but also due to the technological capabilities of Huawei’s multi-chip processor—considered one of the most advanced in its category within China.
In response to the allegations, TSMC asserted its commitment to adhering to all relevant regulations, stating that it had ceased shipments to Huawei since mid-September 2020. The company has emphasized its proactive communication with the U.S. Commerce Department regarding these matters. A timeline of events details the investigation’s progression, including an October 2024 discovery by TechInsights of a TSMC chipset inside Huawei’s AI processor, leading to a November directive from the U.S. Department of Commerce to halt shipments to certain Chinese firms, including Sophgo. Following this, the U.S. considered imposing further sanctions against additional Chinese companies in early 2025.