The US Department of Commerce threatens TSMC with a billion-dollar fine after it was revealed that the company supplied chips to Huawei.
Chip manufacturer TSMC may face a billion-dollar fine after indirectly supplying chips to Chinese telecom company Huawei, according to anonymous sources via Reuters. Since 2020, it has been prohibited for chip manufacturers to supply chips with American technology to Huawei. TSMC’s chips ended up with Huawei through the Chinese company Sophgo. According to the Department, TSMC should have better monitored who Sophgo’s customers were.
Indirect delivery
TSMC’s chips reached Huawei through an indirect route. The Chinese company Sophgo was the link between the two. This allowed Huawei to circumvent American trade restrictions, with all the consequences for TSMC. According to Reuters, TSMC should have better monitored who the customers of Sophgo’s chips were. The US Department of Commerce states that TSMC could have foreseen that the risk was real that Sophgo would supply the AI processors to Huawei.
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TSMC immediately ceased deliveries after the discovery, and Sophgo was placed on the American blacklist. This means that the US must give explicit permission when a company sells American technology to Sophgo.
This careless situation could result in a billion-dollar fine for TSMC. The US Department is reportedly considering a fine of a billion dollars or more, with a final decision still pending.