Wafer Displays – Image Credit: TSMC
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TSMC notifies US of Huawei's attempt to violate China sanctions restricting chip exports AI to China as investigation that could impact Apple chip production continues
In 2022, the United States imposed controls that severely restrict any export of AI chips to China. Two years later, TSMC warns that an attempt has been made to violate those rules.
TSMC has told the U.S. Commerce Department that a customer placed an order for chips that appear to violate sanctions, Reuters reports. The customer attempted to order a chip that was similar in design to the Ascend 910B, a processor designed by Huawei.
The chip was specifically designed to be used to train a large language model, a process in AI manufacturing.
TSMC, the Commerce Department, and Huawei did not respond to requests for comment.
Time to review
The Commerce Department's warning comes as TSMC faces a very similar investigation.
On October 18, it was revealed that the Commerce Department was investigating TSMC for potential sanctions violations. The 2020 block prevented Huawei from accessing components from U.S. companies without department approval.
The rules also barred access to chips made using equipment sourced from the U.S., including TSMC, which uses such equipment to make its chips.
The investigation aimed to determine whether TSMC was producing smartphone or AI chips for Huawei. This was apparently done through an intermediary firm that passed off Huawei as a client, with the investigation determining whether TSMC had carried out sufficient due diligence on the client before starting production.
If the investigation finds that TSMC violated the sanctions, it could face fines, including its own sanctions. The latter could be more damaging, as it could directly impact the production of chips for customers, including Apple.
Sanctions against TSMC would force Apple to find another chip supplier to work on its products. This is a terrible prospect for Apple in the short term, as the complexity of chip manufacturing means there is no easy way to quickly scale up production with another foundry.
At worst, it could mean a period where Apple is severely constrained in its chip supply as it switches from one supplier to another. This, in turn, will hurt the production of all its products, including the iPhone.
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