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Taiwan Semiconductor Manufacturing Company (TSMC) has assured that it is committed to complying with all regulations that prohibit them from selling chips and conducting business transactions with Chinese technology giant Huawei. Huawei is prohibited by US law from acquiring high-end chips manufactured using US-origin technology, and TSMC’s comments came in response to reports claiming the company was being investigated by the US for ties to Huawei. The purported investigation is being led by the Department of Commerce, and includes TSMC’s artificial intelligence and smartphone chips.
TSMC Confirms It Will Take Swift Action To Resolve Any Issues That May Stem From A Potential Lack Of Compliance Following The Investigation
TSMC’s statement comes after a paid report in The Information claimed that the Commerce Department was investigating TSMC for supplying Huawei with chips used in smartphones or artificial intelligence systems. Huawei’s smartphone chips have come under intense scrutiny since US sanctions in 2020 stopped TSMC selling its most advanced products to the company.
For example, TSMC cannot sell chips made via 7-nanometer or lower process technology nodes to Huawei, and since Huawei’s competitors like Apple are now using 3-nanometer chips in their smartphones, the restrictions have dealt a sizable competitive blow to the company because of its performance. with the Chinese government.
The emergence of AI is increasing scrutiny of advanced processor shipments worldwide. This has led to NVIDIA facing US restrictions on selling some products to Huawei, and it has also increased China’s efforts to develop its local AI ecosystem to reduce dependence on Western technology.
In response, TSMC has emphasized that “is law-abiding company,” adding that “We are committed to complying with all applicable regulations.” TSMC stated that if it had “any reason to believe there is a problem, we will take immediate action to ensure compliance.”
With growing demand for AI processors helping TSMC recover from the downturn in the consumer electronics industry, any violation of US law could spell complications for the global semiconductor industry. Because TSMC supplies the majority of made-to-order chips worldwide, legal and regulatory complications may limit its access to advanced chip manufacturing equipment.
This in turn may force companies to diversify their chip manufacturing supply chains. TSMC’s sizable presence in Taiwan and the region’s geopolitical upheaval with China have also created unease among chip companies about the threat of supply chain disruptions in the event of conflict in the South China Sea. NVIDIA CEO Jensen Huang said last month that his company’s chip design capabilities would allow it to move away from TSMC in the worst-case scenario since NVIDIA designed “diversity and redundancy in every aspect wherever we can. And the final piece, is, having enough intellectual property in our company that if we had to move from one factory to another, we have the ability to do that..”
$TSM TAIWAN SEMI RESPONSE:
“TSMC IS A LAW COMPANY AND WE ARE COMMITTED TO COMPLYING WITH ALL APPLICABLE REGULATIONS.
IF WE HAVE REASON TO BELIEVE THERE IS A PROBLEM, WE WILL TAKE IMMEDIATE ACTION TO ENSURE COMPLIANCE.” https://t.co/H3oGDj0D6w
— Stock Talk (@stocktalkweekly) October 18, 2024
