According to reports, TSMC has suspended shipments to customers after its chips were found to be included in Huawei products. TSMC and other chipmakers are prohibited from doing business with Huawei without approval from the U.S. government. Researcher Min-Yen Zhang told BI that questions have been raised about this issue. “Shadow Network” of Chip Supply.
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Taiwan Semiconductor Manufacturing Company has suspended shipments to customers after it was discovered that Huawei Technologies Co., Ltd.’s products, which are subject to U.S. export controls, were contaminated with chips, a Taipei government official said anonymously. he told AFP.
According to Bloomberg, TSMC has notified the governments of the United States and Taiwan because the move could violate U.S. sanctions restricting technology transfers to Chinese companies. TSMC is Taiwan’s largest company and the world’s largest independent purpose-built semiconductor foundry.
TSMC and other chipmakers are prohibited from doing business with Huawei without approval from the U.S. government. The sanctions are part of efforts to limit Huawei’s technological capabilities, particularly in areas such as 5G and AI.
The report raises questions about supply chain transparency and could lead to increased export monitoring, according to researchers and analysts who spoke to BI.
On Wednesday, Chairman of the Chinese Communist Party Special Committee John Moolener condemned the development in a statement.
“Reports that TSMC’s cutting-edge chips are contributing to Huawei’s AI development represent a catastrophic failure of U.S. export control policy,” he said.
“AI accelerators such as those powered by these chips are at the forefront of a technology race with the Chinese Communist Party, and we fear that the damage caused here could have significant national security implications.” added Moolenaar. “Congress needs immediate answers from both BIS and TSMC about the scope and scale of this disaster. The U.S. government must take immediate steps to prevent something like this from happening again.”
TSMC, Huawei, and the Department of Commerce did not immediately respond to Business Insider’s requests for comment.
TSMC told Bloomberg that it has suspended all shipments to Huawei since September 15, 2020. The company declined to comment on reports that its chips were used in Huawei products.
“TSMC is a law-abiding company and is committed to complying with all applicable rules and regulations, including applicable export controls,” TSMC said in an emailed statement to Bloomberg. Ta. “We have actively communicated with the U.S. Department of Commerce regarding the matters described in the report. At this time, we are not aware that TSMC is the subject of any investigation.”
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Chip’s “Shadow Network”
The report adds to US concerns that Huawei is potentially acquiring advanced chips despite being blacklisted since 2020. The U.S. Semiconductor Association warned last year that Huawei was building a shadow manufacturing network.
Ming-Yen Zhang, a researcher who focuses on the political economy of semiconductors, told Business Insider that the development raises questions about the opacity surrounding the “shadow network” of Huawei’s chips, including the size of the web and the nature of the network. He said he was raising issues such as the nature of the situation.
He said public information suggests TSMC strictly complies with export controls, but a deeper understanding of Huawei’s network is needed to improve due diligence.
“If it remains unclear, what happened with TSMC could happen to other chip makers, because they don’t know whether the chips they sell will be resold to Huawei,” Chiang said. spoke.
supply chain issues
Analysts said the situation could have other implications, including increased mistrust of TSMC’s supply chain and increased regulatory scrutiny.
Kate Lehman, chief market analyst at Avatrade, said the broader concern was how Huawei acquired its advanced chips.
“This raises suspicions about potential loopholes and third-party intermediaries acting on their behalf,” she said.
“If TSMC is found to have violated export controls, it could be subject to penalties that could limit its access to U.S. technology,” she continued, adding that this would negatively impact TSMC’s operations. He added that it would have far-reaching implications for tech giants like Apple and Nvidia. It relies heavily on TSMC for chip production.
Lehman said the issue could lead to ever-tighter export controls for companies involved in sensitive technology and increased scrutiny of their supply chains.
export regulations
On Wednesday, Taiwan’s Economy Minister JW Kuo told reporters in Taipei that Taiwan respects the US export control measures and will strongly communicate this position to the industry.
A spokesperson for the U.S. Department of Commerce told Bloomberg that the agency’s Bureau of Industry and Security is “aware of reports alleging possible violations of U.S. export controls.”
Xiaomeng Lu, director of geotechnical operations at consulting firm Eurasia Group, said the U.S. investigation into TSMC, reported by The Information on October 17, is likely to look into whether the company complies with export control rules. said.
“This question is a little different from whether Huawei obtained restricted chips from TSMC through illegal channels,” she told GZERO Media, a subsidiary of Eurasia Group.
“If Huawei is doing this, this is a more geopolitically significant development than any potential TSMC misconduct and proves that TSMC is following all U.S. rules and regulations.” If they do, Huawei will be subject to severe penalties. And I’m almost certain they will.” Added.
