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TSMC Cuts Supply to Chinese AI Firm Over Huawei Chip Concerns

U.S. Commerce Department aware of potential export control breach as controversy unfolds
Taiwan
t 2330.TW Blue Chip 150 OM 60 Semicon 75 Tech 350
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Taiwan Semiconductor Manufacturing Co. suspended chip deliveries to Chinese artificial intelligence company Sophgo following reports that its semiconductor appeared in a restricted Huawei processor.

The move intensifies scrutiny over China’s access to advanced technology amid tightening U.S. export controls. The chip in question was found in Huawei’s Ascend 910B AI processor, according to people familiar with the matter who asked not to be identified discussing private information.

Sophgo, backed by crypto mining giant Bitmain, denied any business ties with Huawei and said it strictly follows U.S. export regulations. The company submitted a detailed report to TSMC defending its compliance record.

The controversy highlights growing tensions in the semiconductor industry as Washington works to restrict China’s access to advanced chip technology. TSMC, the world’s largest contract chipmaker, faces increasing pressure to ensure its products don’t reach restricted entities.

While TSMC declined to comment on the matter, the U.S. Commerce Department acknowledged it was aware of potential export control violations. Huawei, which has been under U.S. trade restrictions since 2019, hasn’t responded to requests for comment.

The development marks another setback for China’s semiconductor sector as it grapples with expanding U.S. export controls designed to slow its technological advancement.

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