The US Commerce Department is investigating whether Apple chipmaker TSMC violated US sanctions against China by supplying smartphone and artificial intelligence chips to Huawei. The investigation was prompted in part by Huawei's surprising ability to renew competition with the iPhone.
Update: A new report today says TSMC has reported itself to the U.S. government based on its own suspicions about the order.
If TSMC is found guilty, it could face sanctions that could prevent it from making future Apple chips.
The Basic Backstory of the iPhone and Huawei
Huawei smartphones used to be a serious competitor to the iPhone, not only in China but around the world. That ended when the US government imposed sanctions on China, banning US companies from exporting advanced technology to the country.
This included 5G chips made in the US, and since you couldn’t launch a premium smartphone without 5G, this effectively ended Huawei’s competitiveness.
However, that all changed in 2023 when Huawei released the Mate 60, which included 5G. No one could understand how this was possible, given that Chinese companies didn’t have the technology needed to make the chips. Even the US National Security Advisor commented on the unexpected development.
There was a strong suspicion that US sanctions had been violated, which led to an investigation.
TSMC May Have Breached Sanctions
Apple chipmaker TSMC is now suspected of supplying 5G and AI chips to Huawei using U.S.-made equipment, The Information reports.
The U.S. Commerce Department is investigating whether Taiwan Semiconductor Manufacturing Co. made artificial intelligence or smartphone chips for Chinese tech giant Huawei Technologies in violation of U.S. export rules, two people with direct knowledge of the matter said.
If the chips did come from TSMC, the orders were likely placed on behalf of intermediary companies, but the chip maker is required to conduct due diligence to verify the identity of the end user. The investigation will determine whether TSMC did so.
Could Have Implications for Apple
If TSMC is found to have failed to meet its obligations, it could face fines that would impact its ability to make future Apple chips.
If the Commerce Department finds that TSMC violated export regulations in its dealings with Huawei, it could impose a fine or more severe sanctions, such as temporarily restricting TSMC's ability to access U.S. technology.
TSMC said it has compliance systems in place, but it is fully cooperating with the investigation and is taking its own steps to determine whether its audits failed.
9to5Mac's Take
While there have been a number of possible explanations, the most likely has always seemed to be someone violating U.S. sanctions to supply 5G chips to Huawei.
Apple, of course, is in no way involved, but could potentially be caught up in the fallout if TSMC is indeed found guilty.
One would hope that the Commerce Department would take U.S. interests into account in this matter and limit any penalties to a fine, but the government's responses have not always reflected a holistic view.
Photo: Sajjad Nori on Unsplash
