Taiwan Semiconductor Manufacturing Company (TSMC) TSMC could face a $1 billion fine to settle a US export control investigation that was opened over a chip manufactured by TSMC. The chip was manufactured for the Chinese company Sophgo. It contains US technology and ended up in a Huawei AI processor, Reuters has learned from insiders.
According to the sources, the US Department of Commerce investigated the work of the contract manufacturer for the Chinese company Sophgo. The chip manufactured by TSMC matched a chip that was ultimately found in Huawei's high-end AI processor, the Reuters informants said.
Huawei is accused of violating sanctions and stealing trade secrets. The company is therefore on a US trade list that prohibits the purchase of goods manufactured with US technology.
According to Lennart Heim, a researcher at the RAND Technology and Security and Policy Center in Arlington (Virginia, USA), who follows Chinese developments in the field of AI, TSMC has produced almost 3 million chips in recent years that correspond to the design ordered by Sophgo and have probably ended up at Huawei.
The size of the potential penalty stems from export control regulations, which allow for a fine of twice the value of transactions that violate the regulations, the whistleblowers said.
In March, TSMC told the White House that it plans a new $100 billion investment in the United States that includes the construction of five additional chip factories in the coming years.
US Commerce Secretary Howard Lutnick emphasized the need for export controls at a conference in Washington last month, saying, "We will be looking in this administration to dramatically increase enforcement and fines for people who break the rules." Reuters has not yet been able to determine how the Trump administration will deal with TSMC or when the matter will be resolved.
