Taiwan Semiconductor Manufacturing Company (TSMC) could be hit with a fine of over $1 billion by the U.S. Department of Commerce. The penalty relates to a possible violation of U.S. export controls, with reports suggesting that chips made by TSMC for a Chinese company, Sophgo, may have ended up in Huawei’s AI processors. Huawei has been on a U.S. trade blacklist, which limits its access to U.S.-made technology and goods.
Since TSMC uses American technology in its chip-making process, it falls under U.S. export rules. A researcher estimates that TSMC produced nearly three million chips for Sophgo, raising concerns that they may have been diverted to Huawei. TSMC clarified that it has not supplied chips to Huawei since September 2020 and is fully cooperating with the ongoing U.S. investigation. Following the news, TSMC’s stock price dropped slightly.
