The world's largest chipmaker TSMC faces a fine of $1 billion or more after the US Department of Commerce found components from the Taiwanese company in Huawei's Ascend 910B AI accelerators, Reuters reports.
The Commerce Department investigated TSMC's supply of chips to Sophgo, a Chinese company that specializes in creating tensor computing units and chips based on the RISC-V architecture. The investigation found that the chips manufactured by TSMC based on Sophgo's design are completely identical to those used in the Ascend 910 processors.
Lennart Geim, a researcher at the RAND Center for Technology, Security, and Policy, notes that TSMC has produced about three million chips over the past few years that match designs ordered by Sophgo and later found their way into Huawei accelerators. The potential $1 billion fine is based on export control rules that allow penalties of up to twice the value of transactions that violate those rules.
The Taiwanese chipmaker is subject to U.S. export control rules, among other things, because it uses American technology. This means TSMC cannot supply its products to Huawei and is not allowed to make leading chips for Chinese companies without a U.S. license.
Game also notes that given the design of Sophgo's chips, which are aimed at accelerating artificial intelligence, the Taiwanese company should not have fulfilled such an order for any Chinese firm at all.
As a reminder, TSMC stopped supplying chips to Sophgo and its subsidiary Bitmain in September 2024. This happened after the Taiwanese company reported that chips it produced were found in Huawei's AI accelerators. Subsequently, the US imposed additional restrictions on chips that TSMC can export to China.
Huawei is central to China's efforts to build its own AI accelerators, but the company has also faced accusations of technology theft and sanctions violations. The United States, in particular, prohibits the supply of goods made with American technology to the Chinese company.