Taiwan Semiconductor Manufacturing Co. (TSMC) could face a penalty of $1 billion or more to settle a U.S. export control investigation over a chip it made that ended up inside a Huawei artificial intelligence processor, according to two people familiar with the matter.
The U.S. Department of Commerce has been investigating the world's biggest contract chipmaker's work for China-based Sophgo, the sources said. The design company's TSMC-made chip matched one found in Huawei's high-end Ascend 910B artificial intelligence processor, according to the people, who requested anonymity because they were not authorized to speak publicly about the matter.
Huawei — a company at the center of China's AI chip ambitions that has been accused of sanctions busting and trade secret theft — is on a U.S. trade list that restricts it from receiving goods made with U.S. technology. TSMC made nearly 3 million chips in recent years that matched the design ordered by Sophgo and likely ended up with Huawei, according to Lennart Heim, a researcher at RAND's Technology and Security and Policy Center in Arlington, Virginia, who is tracking Chinese developments in AI.
With your current subscription plan you can comment on stories. However, before writing your first comment, please create a display name in the Profile section of your subscriber account page.