Reported US probe of TSMC could hurt its largest customers
Tear down a Huawei product and you allegedly might find TSMC chips — even though the US government has banned the chip manufacturer from exporting to China.
A Bloomberg investigation published on Tuesday found that Huawei Technologies, China’s largest semiconductor supplier, uses an Ascend 910B chip manufactured by TSMC in its AI accelerator. If TSMC is found selling chips to Huawei, that could potentially be a violation of the US government’s export sanction against Chinese companies.
In that case, there may be negative ripple effects for the other companies that rely on its chips — namely Apple, TSMC’s largest customer, which constitutes 25% of TSMC’s revenue. US chip giants like Nvidia, AMD, and Intel also rely on TSMC’s manufacturing capabilities.
But things might not look that bad for TSMC: Reuters reported earlier today that the research firm which found the teardown notified TSMC of the chip before publishing its findings, leading TSMC to notify the US Commerce Department of the chip a few weeks ago.
The Commerce Department has blacklisted Huawei from accessing US technology by limiting companies’ ability to export chips to China. The rule covers firms that produce chips outside of the US but use US semiconductor technologies — and since TSMC is a foundry that uses US-sourced equipments to make chips, the Taiwanese company has to adhere to US export rules as well. As a result, TSMC has stopped taking orders from Huawei, starting September 15, 2020.
Concerns over TSMC’s dealings with China have surfaced recently. Last week, The Information reported that the Commerce Department was investigating whether TSMC had breached US sanction rules to sell chips to Huawei, one day after TSMC reported blockbuster earnings that led to a 12% surge in shares. In a statement to Reuters and Bloomberg, TSMC said that it was a “law-abiding” company and declined that it was the subject of any investigations. The US government has not confirmed any ongoing investigations either.
In that case, there may be negative ripple effects for the other companies that rely on its chips — namely Apple, TSMC’s largest customer, which constitutes 25% of TSMC’s revenue. US chip giants like Nvidia, AMD, and Intel also rely on TSMC’s manufacturing capabilities.
But things might not look that bad for TSMC: Reuters reported earlier today that the research firm which found the teardown notified TSMC of the chip before publishing its findings, leading TSMC to notify the US Commerce Department of the chip a few weeks ago.
The Commerce Department has blacklisted Huawei from accessing US technology by limiting companies’ ability to export chips to China. The rule covers firms that produce chips outside of the US but use US semiconductor technologies — and since TSMC is a foundry that uses US-sourced equipments to make chips, the Taiwanese company has to adhere to US export rules as well. As a result, TSMC has stopped taking orders from Huawei, starting September 15, 2020.
Concerns over TSMC’s dealings with China have surfaced recently. Last week, The Information reported that the Commerce Department was investigating whether TSMC had breached US sanction rules to sell chips to Huawei, one day after TSMC reported blockbuster earnings that led to a 12% surge in shares. In a statement to Reuters and Bloomberg, TSMC said that it was a “law-abiding” company and declined that it was the subject of any investigations. The US government has not confirmed any ongoing investigations either.
