TSMC factory sign – Image courtesy of TSMC
13 Facebook x.com Reddit
A Commerce Department investigation into possible sanctions violations by TSMC could spell trouble for Apple as its chip partner faces fines, which will ultimately hurt the production of chips for iPhones and Macs.
In 2020, the United States imposed sanctions on Huawei, blocking the company from accessing components from American companies without approval from the Commerce Department. It also prevented Huawei from using chips made on equipment sourced from the United States — a restriction that could now cause problems for TSMC and, by extension, Apple.
The Information’s source claims that the Commerce Department contacted TSMC in early fall to inquire whether the chipmaker was involved in making smartphone chips or AI chips for Huawei.
The inquiry appears to be the initial stage of an investigation into whether TSMC violated export regulations by willingly supplying chips to Huawei.
The sources say TSMC contracted with a middleman firm that passed itself off as a client of Huawei. TSMC does have to conduct due diligence on orders to ensure they are legitimate, and the investigation could determine whether TSMC’s checks were sufficient to remain legitimate.
When sanctions were imposed on Huawei, TSMC said it had stopped accepting new orders from the Chinese tech company.
If true, TSMC faces fines, including its own sanctions. The latter could be more damaging because they could directly impact chip production for customers, including Apple.
If TSMC is temporarily blocked from accessing U.S. technology and equipment, it could prevent it from starting production of new lines or maintaining existing lines. This could put products like Apple’s mobile chips at risk of serious restrictions.
In that case, Apple might have to find another chip partner in the meantime. But given Apple’s scale, that could be slow and extremely expensive.
Such a fine could have even more serious consequences. TSMC's Arizona plant is still under construction, and the block would immediately halt work.
The political element of the facility could help keep the Commerce Department from incurring a fine. In April, TSMC received a $6.6 billion subsidy from the Commerce Department under the CHIP Act to continue chip investments in Arizona.
Follow AppleInsider on Google News
