TSMC, the world’s largest chipmaker, may face a fine of more than $1 billion, according to knowledgeable sources. Although this amount is not critical for TSMC, it is hardly a trifle.
The fine is likely to be formalized in the form of a settlement as a result of an investigation by the US Department of Commerce into whether the company violated export regulations by producing chips that eventually ended up in China’s Huawei.
At the end of last year, TSMC allegedly informed the United States that one of Huawei’s accelerators — Ascend 910B for artificial intelligence systems — contained its chip. Soon after, the US authorities placed Sophgo on the so-called «Entity List» because it could have been an intermediary between TSMC and Huawei — allegedly without TSMC’s knowledge.
Huawei is already on this list, so any supply of products by American companies to it is possible only under a license. Now the same requirement applies to Sophgo. TSMC is obliged to comply with export restrictions because some of its equipment is made in the United States.
If the sources are correct, the US government has investigated and concluded that TSMC has violated the restrictions. However, even if there was a violation, it could have been unintentional. According to the sources, the amount of the fine is based on export control rules, which provide for a fine of up to double the value of transactions that violate the restrictions.
TSMC spokeswoman Nina Kao said the company has not supplied anything to Huawei since 2020. The potential fine, she said, could be formalized as a preliminary «letter of accusation», to which the company can still respond — so the final decision seems to have not yet been made.
In a broader context, despite the fact that TSMC recently announced a $100 billion investment in the United States, this does not exempt it from compliance with export restrictions. And Trump’s recent diplomatic maneuvers should not give the wrong impression.
We have to wait for official confirmation from the US Department of Commerce or TSMC itself to find out the final position.
Source: pcgamer