The U.S. Department of Commerce has launched an investigation into whether Taiwan Semiconductor Manufacturing Co. (TSMC) violated U.S. export regulations by manufacturing AI and smartphone semiconductors for Huawei. The inquiry, reported by IT specialist media The Information on Oct. 17 (local time), is still in its early stages, and the duration for gathering information and reaching a conclusion remains unclear.
Sources revealed that the U.S. Department of Commerce recently inquired with TSMC about its involvement in manufacturing smartphone and AI chips for Huawei. The investigation is examining whether Huawei may have purchased chips from TSMC indirectly by placing orders through intermediary companies with different names. “The department is closely examining whether TSMC properly fulfilled its due diligence obligations regarding its customers when accepting orders,” another source added.
The investigation comes amid heightened scrutiny of Huawei’s supply chain, particularly after the U.S. government barred the Chinese tech giant from purchasing semiconductors made using U.S. equipment in 2020, citing national security concerns. U.S. authorities have also prohibited Huawei from using U.S. technology to manufacture chips without approval from the U.S. Department of Commerce. TSMC, the world’s largest contract semiconductor manufacturer, heavily relies on U.S. equipment for its operations, making it subject to these export control regulations.
Last year, Huawei surprised the market by launching the Mate 60 Pro smartphone, featuring a 7nm process processor made by Chinese foundry Semiconductor Manufacturing International Corp. (SMIC). However, there were projections that it would be difficult to consistently supply 7nm chips due to supply constraints.
The current investigation is also focusing on whether TSMC was involved in manufacturing AI chips designed by Huawei. As the U.S. has blocked the export of Nvidia chips to China, Chinese companies have turned to AI chips made by Huawei as an alternative.
TSMC has responded to the media, emphasizing its commitment to legal compliance. “If there are any issues, we will promptly conduct investigations and proactively communicate with relevant parties to ensure legal compliance,” the company stated.
The backdrop of this investigation is the ongoing trade tensions between the United States and China, particularly in the technology sector. The U.S. has imposed various sanctions on Chinese companies, including Huawei, to prevent the transfer of sensitive technologies that could threaten U.S. national security. Huawei, a major player in the global smartphone and telecommunications infrastructure markets, has been significantly impacted by these sanctions, particularly in its ability to procure advanced semiconductors.
