According to sources cited by Reuters, the fine is related to TSMC’s involvement in the production of chips that allegedly ended up in Huawei’s hands, despite the U.S. government’s stringent restrictions on exporting technology to the Chinese tech giant. The potential fine could be part of a settlement following an investigation by the U.S. Department of Commerce, which is looking into whether TSMC violated export rules.
The controversy began late last year when TSMC notified the U.S. government that one of its chips was found in Huawei’s Ascend 910B AI processor. Shortly after, the U.S. placed Sophgo, a computing design company that served as an intermediary between TSMC and Huawei, on its Entity List. This list includes companies that U.S. firms are prohibited from doing business with unless they obtain a special license. Despite claims from TSMC that it has not supplied Huawei since 2020, the U.S. government has raised concerns that TSMC may have inadvertently violated export restrictions.
The fine could potentially reach over $1 billion, as U.S. export control laws allow for penalties of up to twice the value of any transactions that violate these regulations. While this amount is substantial, it is not expected to severely impact TSMC’s overall financial health, given its dominant position in the global semiconductor industry.
TSMC’s Nina Kao has emphasized that the company has not provided any chips to Huawei since 2020, asserting that any violation may have been unintentional. Still, if the fine is finalized, it would mark a significant development for TSMC, which is closely watched by governments and companies around the world.
As of now, TSMC has been given time to respond to the matter, with a “charging letter” expected to be issued, providing the company an opportunity to contest or negotiate the fine.
For more details, visit the full story on PC Gamer here.