If TSMC is found guilty, it might have to pay higher penalties and also face temporary restrictions on accessing US-made technologies.
After being alleged of violating US sanctions by providing top-notch semiconductors to Huawei, Taiwan’s TSMC, equipped with the world’s largest foundry, has reported having stopped shipments of chips to a customer. Huawei, the globe’s biggest equipment manufacturer for mobile internet networks, has now caught itself in a deadly geopolitical tussle between China and the US.
In 2019, the Trump administration imposed sanctions against Huawei, which escalated during the pandemic. According to US officials, the strategy was undertaken because Huawei could use US technology to benefit the Chinese army, which the company denied at the World Trade Organization (WTO). The sanctions have wiped Huawei out of international supply chains, which provided access to US-made technologies, components, and equipment vital to producing powerful semiconductors.
A few weeks back, reports also surfaced that the US is deeply investigating TSMC’s business involvement with Chinese firms as the former allegedly infringed US norms. In retaliation, TSMC said that the company is willing to undertake necessary action to ensure the proof of compliance. As per the Fortune report, US Commerce Department officials had approached TSMC to check whether the latter is working with Huawei to develop AI chips and smartphones.
Reports added that the investigation is still in the nascent stage, but if TSMC is found guilty, it might have to pay higher penalties and also temporarily restrict access to US-made technologies. On October 11, TSMC surprisingly found that chips produced for some other customer had also reached Huawei, and hence, the company instantly switched on export control measures and stopped shipments to the customer.
