Bloomberg reports that TSMC has identified the customer responsible for redirecting chips to Huawei. According to unnamed sources, TSMC discovered this month that chips it produced for a specific client ultimately ended up being used by Huawei, potentially violating U.S. sanctions aimed at curbing China’s semiconductor technology advancements. The sources indicated that TSMC proactively ceased shipments to this particular client around mid-month and informed both the U.S. and Taiwanese governments, launching a more thorough investigation into the matter.
John Moolenaar, chair of the U.S. House of Representatives Special Committee on China, called on the U.S. Department of Commerce and TSMC on Wednesday to explain why TSMC-produced chips were found in devices manufactured by Huawei.
Bloomberg notes that it remains unclear whether this TSMC client was acting on behalf of Huawei or where the client is based. Various media outlets have reported on this incident in recent days, providing differing accounts. Among them, The Information reported that the U.S. government reached out to TSMC recently to inquire whether the company was manufacturing chips for Huawei.
Another insider informed Bloomberg that officials from the Bureau of Industry and Security within the U.S. Department of Commerce met with TSMC executives in mid-October to discuss supply chain-related issues, including whether third-party distributors could provide regulated technology to China. This source described the meeting as collaborative, though it is not known if the discovery of TSMC chips in Huawei products was discussed at that time.
Since August 2020, Huawei has been on the U.S. sanctions list, which means that without government authorization, Huawei is prohibited from purchasing chips involving U.S. technology from TSMC and other fabrication firms. Over the past year, Huawei has relied on domestic partners like SMIC to manufacture semiconductors, including 7nm chips used in smartphones.
U.S. officials have often expressed skepticism about SMIC’s capacity to mass-produce 7nm chips and their performance. Now, as TechInsights dismantles Huawei’s latest AI chips, the discovery of TSMC products could reinforce U.S. government concerns.
TSMC has stated that it stopped all shipments to Huawei after September 15, 2020. When questioned about the TechInsights report, TSMC reiterated this position.
Bloomberg’s inquiries have not elicited comments from a TSMC representative on the latest developments, and Huawei spokespersons have yet to issue remarks. A spokesperson from the U.S. Department of Commerce had previously indicated on Tuesday that the Bureau of Industry and Security was “aware of reports regarding potential violations of U.S. export control regulations.”
In an email statement issued on Wednesday, TSMC affirmed its compliance with all applicable rules and regulations, including relevant export control regulations, and mentioned that it had proactively communicated with the U.S. Department of Commerce regarding these issues, currently facing no investigations.
In a statement released on Tuesday, Huawei asserted that since the implementation of the Foreign Direct Product Rules (FDPR) amendment in 2020 by the U.S. Department of Commerce, it has not had any chips produced by TSMC.
Taiwan’s Economic Minister Wang Mei-hua stated to reporters on Wednesday that Taiwan respects U.S. export control measures and will fully communicate with TSMC regarding these matters.
Representative Moolenaar criticized the discovery of TSMC chips in devices made by Huawei as a “catastrophic failure” of U.S. export control policies, emphasizing that “Congress needs immediate responses from both the Department of Commerce and TSMC concerning the scope and scale of this disaster.” Neither the Commerce Department nor TSMC provided immediate comments to Reuters on this matter.
