TSMC Rejects U.S. Investigation Rumors After Reports Link Its Chips to Huawei

TSMC has denied claims that the U.S. is investigating its dealings with Huawei, a Chinese tech giant on the U.S. trade blacklist.?

Reports emerged that TSMC’s chips were discovered in a Huawei product, which led to inquiries by the U.S. Commerce Department about potential indirect chip access through third parties. However, TSMC has responded by affirming its compliance with U.S. export controls while denying any ongoing investigation.

TSMC Asserts Compliance With Export Rules and Regulations

The issue first surfaced after The Information reported last week that the U.S. Commerce Department had contacted TSMC to inquire about a possible collaboration with Huawei on smartphone and AI chips.

TAIWAN SEMICONDUCTOR MANUFACTURING CO LTD: NOT AWARE OF TSMC BEING SUBJECT OF ANY INVESTIGATION AT THIS TIME

TAIWAN SEMICONDUCTOR MANUFACTURING CO LTD: HAS NOT SUPPLIED TO HUAWEI SINCE MID-SEPTEMBER 2020

— RedboxGlobal (@RedboxWire) October 22, 2024

The report suggested that officials were investigating whether TSMC conducted proper due diligence to prevent Huawei from accessing its chips indirectly through third parties.

The investigation took a significant turn when TSMC disclosed to U.S. authorities that one of its chips was discovered in Huawei’s Ascend 910B AI chip, identified during a teardown analysis by tech research firm TechInsights. The Ascend 910B AI chip is considered one of the most advanced chips available from a Chinese company.

This revelation has intensified speculation that TSMC’s dealings with Huawei may breach U.S. export controls, putting the company in a challenging position.

Recall that the U.S. has long restricted Huawei’s access to semiconductors made with American technology, initially placing the company on the trade blacklist in 2019 and tightening export controls in 2020.

TSMC, which had previously manufactured chips for Huawei, ceased fulfilling new orders after these restrictions were imposed. However, Huawei recently highlighted the ban as a catalyst for growth in chip technology.

TSMC’s decision to proactively inform U.S. authorities about the discovery of its chip in a Huawei product may be seen as an effort to demonstrate good faith and compliance with regulations.

While the company has denied any formal investigation, experts believe that if TSMC’s chips are linked to Huawei in violation of export rules, it could face severe consequences.

These could include losing U.S. trade privileges, partnerships with key tech institutions, and a hit to its stock due to reputational damage and loss of customers.