HomeUS Threatens Record $1B TSMC Fine for Huawei AI Chip Supply Breach
Taiwan Semiconductor Manufacturing Company (TSMC) could face a fine of $1 billion or more to settle a U.S. export control investigation. The probe centers on a TSMC-made chip found inside a Huawei AI processor, as reported by Reuters.
A TSMC spokesperson declined to comment further, stating the company is currently in a "quiet period," according to an emailed statement to TechCrunch.
This development follows an initial report in late 2024 linking TSMC, Huawei, and Chinese chip designer Xiamen Sophgo Technologies. Sophgo is an affiliate of Bitcoin mining firm Bitmain, while TSMC is the world's leading contract chip manufacturer.
Earlier reports suggested a significant number of TSMC's export-controlled AI chip dies were used in Huawei's mass-produced Ascend 910B AI accelerator.
The arrangement is described as a nesting doll: a TSMC chip is integrated into a Sophgo chip, which is then built into Huawei's Ascend 910B processor.
The issue carries weight not only due to export violations but also because Huawei's multi-chip processor is viewed as China's most advanced in its category. An estimated hundreds of thousands of these processors were manufactured using these components.
"TSMC is a law-abiding company committed to complying with all applicable rules and regulations, including export controls," TSMC stated. "In line with regulatory requirements, TSMC has not supplied Huawei since mid-September 2020. Should any potential issues arise, we will take prompt action to ensure compliance, including conducting investigations and communicating with relevant parties. We have proactively engaged with the U.S. Commerce Department on this matter and continue to cooperate."
Timeline of TSMC Chip Shipments to Chinese Companies
October 2024
Canadian tech research firm TechInsights disassembled Huawei's 910B AI processor and identified a TSMC-based chipset inside, according to Reuters. The chipset resembled one produced by Sophgo. Sophgo stated that the U.S. Commerce Department's investigation into potential TSMC-Huawei links does not involve Sophgo or its products, adding it has never had direct or indirect business dealings with Huawei.
November 2024
The U.S. Department of Commerce instructed TSMC to stop shipping advanced chips to certain Chinese customers, including Sophgo.
December 2024
U.S. authorities considered adding Sophgo to the Entity List, a trade restriction blacklist.
January 2025
The U.S. added more than 20 Chinese entities to the blacklist, including AI firm Zhipu AI and Sophgo.
TSMC pledges to spend $100B on US chip facilities
TSMC reportedly halts advanced chip shipments to Chinese companies
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![JoeLee]()
¡Vaya, esta noticia es explosiva! Que TSMC se arriesgue a una multa tan astronómica por un chip con Huawei muestra hasta qué punto la guerra tecnológica se está recrudeciendo. Me pregunto si esto será solo el principio de un efecto dominó para otras empresas globales en la cadena de suministro. Los gobiernos juegan un ajedrez muy peligroso con la industria como tablero 😬. ¡Espero que encuentren una salida que no pare toda la innovación!
Taiwan Semiconductor Manufacturing Company (TSMC) could face a fine of $1 billion or more to settle a U.S. export control investigation. The probe centers on a TSMC-made chip found inside a Huawei AI processor, as reported by Reuters.
A TSMC spokesperson declined to comment further, stating the company is currently in a "quiet period," according to an emailed statement to TechCrunch.
This development follows an initial report in late 2024 linking TSMC, Huawei, and Chinese chip designer Xiamen Sophgo Technologies. Sophgo is an affiliate of Bitcoin mining firm Bitmain, while TSMC is the world's leading contract chip manufacturer.
Earlier reports suggested a significant number of TSMC's export-controlled AI chip dies were used in Huawei's mass-produced Ascend 910B AI accelerator.
The arrangement is described as a nesting doll: a TSMC chip is integrated into a Sophgo chip, which is then built into Huawei's Ascend 910B processor.
The issue carries weight not only due to export violations but also because Huawei's multi-chip processor is viewed as China's most advanced in its category. An estimated hundreds of thousands of these processors were manufactured using these components.
"TSMC is a law-abiding company committed to complying with all applicable rules and regulations, including export controls," TSMC stated. "In line with regulatory requirements, TSMC has not supplied Huawei since mid-September 2020. Should any potential issues arise, we will take prompt action to ensure compliance, including conducting investigations and communicating with relevant parties. We have proactively engaged with the U.S. Commerce Department on this matter and continue to cooperate."
Timeline of TSMC Chip Shipments to Chinese Companies
October 2024
Canadian tech research firm TechInsights disassembled Huawei's 910B AI processor and identified a TSMC-based chipset inside, according to Reuters. The chipset resembled one produced by Sophgo. Sophgo stated that the U.S. Commerce Department's investigation into potential TSMC-Huawei links does not involve Sophgo or its products, adding it has never had direct or indirect business dealings with Huawei.
November 2024
The U.S. Department of Commerce instructed TSMC to stop shipping advanced chips to certain Chinese customers, including Sophgo.
December 2024
U.S. authorities considered adding Sophgo to the Entity List, a trade restriction blacklist.
January 2025
The U.S. added more than 20 Chinese entities to the blacklist, including AI firm Zhipu AI and Sophgo.
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¡Vaya, esta noticia es explosiva! Que TSMC se arriesgue a una multa tan astronómica por un chip con Huawei muestra hasta qué punto la guerra tecnológica se está recrudeciendo. Me pregunto si esto será solo el principio de un efecto dominó para otras empresas globales en la cadena de suministro. Los gobiernos juegan un ajedrez muy peligroso con la industria como tablero 😬. ¡Espero que encuentren una salida que no pare toda la innovación!
