TL;DR
- The US Commerce Department has accused TSMC of violating the country’s export controls.
- The US is also investigating TSMC’s process of profiling its customers.
- If the investigation doesn’t fold in favor of TSMC, it could impact its business with leading customers like Apple.
The United States’ ambition to become the leading semiconductor producer in the world is at stake as TSMC is undergoing an investigation into allegedly conducting business with the Chinese smartphone manufacturer Huawei.
The Commerce Department Believes TSMC Helped Chinese Manufacturers
According to a report by The Information, the US Commerce Department has accused TSMC, the world’s largest chipset foundry, of violating the country’s export controls and helping Huawei, a Chinese manufacturer, develop its 5G and AI chips.
While TSMC has stated that it stopped providing its technology or services to Huawei as soon as the sanctions came in place, US lawmakers have reasons to believe that the company sold its semiconductors to Huawei either directly or indirectly with the help of an intermediary company that carried out the transactions on behalf of Huawei.
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The Federal Department Is Also Looking Into TSMC’s Customer Screening Process
The US is also investigating TSMC’s process of profiling its customers, as it is important for the country’s security that big players vet their customers before providing them with cutting-edge technology or information that could help develop the technology.
In response, TSMC has said that it abides by all the laws and “will take prompt action to ensure compliance, including conducting investigations and proactively communication with relevant parties.”
It’s About The Ban And Export Sanctions Imposed On Huawei
Over the years, the US has placed several restrictions and sanctions on Huawei. While the lawmakers had already banned the Chinese smartphone manufacturer from selling its products in the region, they also put several export sanctions in place, preventing American companies from selling their technology to Huawei.
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TSMC’s Connections With The Chinese Companies Could Affect Apple, Nvidia, And Intel
That said, let’s discuss the consequences of violating the export controls put in place by the US government. If the investigation doesn’t fold in favor of TSMC, it could impact its business with its leading customer, which happens to be the US-based tech giant Apple. The iPhone-maker relies on TSMC’s foundry to provide state-of-the-art 3nm semiconductors that power all the latest devices.
Given that Apple relies heavily on TSMC for components used on its entire lineup, anything that isn’t in favor of the foundry would directly impact its current and future plans. Companies like Nvidia and Intel would also be hit, as they regularly outsource some of their requirements to TSMC. More information about the investigation should surface in the coming days.
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