Huawei vs TSMC: Investigation on China’s chip growth reaches major fines

Huawei vs TSMC chip battle has now reached the new “fines and penalties” chapter. Both companies have been under investigation for months. Looks like the Taiwanese firm may face a major punishment due to the chipset controversy.

After banning Huawei in 2019, the US prohibited the company from using advanced chipmaking tech or products. It even restricted firms like Qualcomm, Intel, and TSMC from supplying top-end chips to sanctioned Chinese firms.

Investigation

Since then, TSMC has stopped the flow of its chip sales in China, especially to Huawei. But in October 2024, the U.S. started investigating TSMC as it suspected the firm of illegally selling chips to Huawei and other banned Chinese companies.

TSMC claimed that it hasn’t been a part of this unlawful activity and has always complied with the U.S. trade regulations. Huawei itself said that it hasn’t received any chipsets from the Taiwanese firm since the ban was imposed in 2019.

Chip Discovery

The situation worsened when TechInsights found a TSMC-made SoC in one of the Huawei AI processors called Ascend 910B. It is an AI chip used for data centers, running AI models, giving a tough spot to Nvidia chipsets.

Hereafter, US increased the probing and found TSMC guilty in this case. A lawmaker even stated that TSMC-made chips have contributed to Huawei’s AI development. It appears as a catastrophic failure of the US export control policy.

Even though TSMC cut the chip supply to many clients in China. But looks like the US authorities are planning to punish the Taiwanese chipmaker for this dispute.

Fines

A new report says that TSMC has been producing AI chips for Sophgo, a Chinese company. One of these chips appeared in Ascend 910B, raising security concerns.

Many analysts said that TSMC should not have made AI chips for Chinese firms after knowing the battle between the US and China. At the same time, these companies could be directly or indirectly linked to Huawei.

Following these points, it seems the Huawei-TSMC chip war will end in fines and penalties. The report suggested that since the Taiwanese chip firm seemed to be a major culprit in this case, it may have to face a fine of $1 billion.

Time will unveil the next chapter in this story.

Huawei vs TSMC: Investigation on China’s chip growth reaches major fines (Image Credits: Huawei)