TSMC can be fined $ 1 billion or more for chips that were used by Huawei

TSMC would be investigated by US export authorities in a process that may result in a $ 1 billion or more semiconductor giant fine. The information is not yet official, but the company is accused of not taking proper precautions to prevent its chips from being used by Huawei.

The US Department of Commerce investigation focuses on a TSMC contract with another Chinese company, Sophgo. According to Reuters sources, although the order comes from Sophgo, the chips made by Taiwanese were found on the ASCEND 910B accelerators, which Huawei makes for AI processing.

While there are no official government statements, Lennart Him, a researcher focused on China’s AI development, confirms that TSMC sent at least three million chips to Sophgo, and that there is a possibility that they were then reversed to Huawei.

Heim also adds that, based on chip design, visibly AI, TSMC should not have risked selling to a China -based company like Sophgo.

Why could the US fine TSMC?

What draws attention in this case is that TSMC is a Taiwanese company, selling products to Sophgo, China. So what would be the US authority to fine semiconductor manufacturer?

It turns out that the United States have laws to control products that use their technologies, even in trade abroad. Because TSMC equipment uses certain US technologies, the government can restrict exports to certain countries, or companies.

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The question is whether the authorities will actually apply a $ 1 billion fine or even higher against TSMC. The widespread tariffs that Trump administration has imposed against different countries – including Taiwan – have caused significant impacts on the world economy and geopolitical friction. Going after a billionaire fine against the largest Taiwanese company can make it difficult for tariff negotiations that the country was currently arguing with the US.