TSMC Under U.S. Investigation for Huawei Ties, Vows 'Prompt Action' if Violations Found

Taiwan Semiconductor Manufacturing Company (TSMC) has vowed to take "prompt action" if found violating U.S. sanctions on Huawei, as the Commerce Department investigates alleged chip sales to the Chinese tech giant. TSMC's response underscores its commitment to compliance amid heightened regulatory scrutiny of semiconductor exports.

TSMC Responds to U.S. Investigation Over Alleged Huawei Chip Sales, Reaffirms Compliance with Sanctions

Following reports that the U.S. Commerce Department is investigating Taiwan Semiconductor Manufacturing Company (TSMC) for alleged connections to Huawei, the company has reaffirmed its dedication to adhering to all regulations prohibiting it from selling chips to the Chinese tech behemoth. TSMC's statement was issued in response to a report that suggested the company was being investigated for the potential supply of processors to Huawei for smartphones or artificial intelligence systems. Huawei is prohibited from acquiring high-end chips manufactured using U.S.-origin technologies under U.S. law.

The investigation, which the U.S. Commerce Department purportedly conducts, is being undertaken in the context of increased scrutiny of Huawei's operations, which was imposed by U.S. sanctions in 2020. According to Wccftech, these sanctions prohibited Huawei from procuring advanced products from companies such as TSMC. Due to these restrictions, TSMC cannot sell processors manufactured using 7-nanometer or lower process technology to Huawei, which has resulted in a substantial competitive disadvantage. This is because Apple and its competitors now employ 3-nanometer chips in their devices.

The increasing significance of artificial intelligence has further heightened the global focus on advanced semiconductor shipments. Additionally, companies like NVIDIA are subject to U.S. restrictions on specific sales to Huawei. As a result of this circumstance, China has been motivated to enhance its domestic AI ecosystem to reduce its dependence on Western technology.

TSMC Reaffirms Commitment to Compliance Amid U.S. Scrutiny, Cites Potential Impact on Global Chip Supply

In its statement, TSMC underscored its unwavering commitment to adhering to all regulations and being "a law-abiding company." The company stated that it is committed to compliance and will "take prompt action" in case of any issues. This strong commitment to adherence to regulations is not only imperative for TSMC but also serves as a reassurance to the industry and investors about the company's integrity and dedication to ethical business practices. The demand for AI processors is instrumental in its recovery from a slowdown in the consumer electronics sector.

Given TSMC's dominance in chip production, any violations of U.S. law could have substantial consequences for the global semiconductor industry. Regulatory issues may restrict the company's access to sophisticated manufacturing equipment, necessitating firms to consider diversifying their chip manufacturing supply chains. TSMC's substantial presence in Taiwan, a region embroiled in geopolitical tensions with China, has also contributed to concerns regarding supply chain disruptions.

Jensen Huang, the CEO of NVIDIA, recently stated that the company has implemented operational flexibility to divert from TSMC if necessary. He clarified that NVIDIA incorporates "diversity and redundancy into every aspect wherever possible," guaranteeing that the organization has sufficient intellectual property to relocate its manufacturing operations to an alternative foundry in the event of a need.