TSMC faces substantial U.S. fines for producing chips for Huawei. The manufacturer indicates that such occurrences are difficult to prevent when organizations place orders through intermediaries.
TSMC indicates that it’s in a difficult position. The company faces billion-dollar fines because it accidentally produced chips for Huawei. The company states that such mistakes will be difficult to prevent in the future as well.
The specific case involves an indirect delivery, where the Chinese company Sophgo placed an order with TSMC. Sophgo is not on the U.S. sanctions list, so the Taiwanese manufacturer produced the chips according to normal procedures. However, Sophgo then channeled the produced chiplets to Huawei, which used them in its own Ascend 910C processors.
Limited Visibility
During the announcement of its financial results, TSMC indicates that it’s very difficult to prevent such situations from its position in the supply chain. “Our role limits our visibility on, and information about, how the final products will be used downstream. This limitation makes it difficult for us to ensure that semiconductors built by us will not be diverted to unforeseen third parties.”
TSMC builds chips based on complex designs provided in GDS files. The manufacturer validates these designs and reworks them into masks for fabrication. In this process, the chip builder says it cannot determine who the actual developer of the designs is, nor what their ultimate purpose is.
In other words, TSMC sees itself as a pawn in the U.S. sanctions. The company can comply with the restrictions in the first instance, but has no mechanisms to prevent further misuse. The Taiwanese manufacturer must adhere to the export regulations because its production lines are filled with American technology. The U.S. arrogates to itself the right to impose rules worldwide on anyone using American technology.