TSMC faces $1 billion US fine for making chips for blacklisted Huawei

[Kaz]

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The company is cooperating.

 

TSMC may be hit with a fine exceeding $1 billion by the U.S. Commerce Department for unknowingly supplying Huawei a compute chiplet for the latter's Ascend 910-series AI processor, Reuters reports. Such a high fine would be rare and perhaps a record, though it also appears to reveal the volume of chips that Huawei got from TSMC by deception.

The potential $1+ billion fine is based on export rules that allow for penalties up to double the value of any unauthorized transaction. So far, no official action has been taken against TSMC, according to the report. In similar cases, the Commerce Department typically sends a document known as a proposed charging letter, listing violation dates, transaction values, and fine calculations. The company is then given 30 days to respond. A past case in 2023 saw Seagate fined $300 million for sending hard disk drives worth $1.1 billion to Huawei.

Last year, it turned out that a compute chiplet that TSMC made for Sophgo, an ally of cryptocurrency mining hardware supplier Bitmain, was actually a compute chiplet for Huawei's Ascend 910-series processor for AI. Huawei has been in the U.S. Department of Commerce's Entity List since mid-2020 and companies like TSMC need to apply for an export license from the USDOC to supply to Huawei products containing American technologies, which includes making chips using tools developed and made by U.S.-based companies.

After TechInsights revealed that Huawei's HiSilicon Ascend 910-series used the chiplet, TSMC suspended its shipments to Sophgo and is now working with the Department of Commerce on the matter. In January, Sophgo was placed on the USDOC's Entity List. However, it remains unclear how many chiplets TSMC produced (indirectly) for Huawei.

 

TSMC faces $1 billion US fine for making chips for blacklisted Huawei | Tom's Hardware

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The company is cooperating.

 

I think the large monetary threat is something news companies are grasping at because it's the maximum possible penalty.  I don't know how TSMC can reasonably be held accountable for Huawei's deception, unless TSMC was aware of the deception.  I suspect any fine will be much smaller as they are cooperating with the investigation.  At most I can see the U.S. gobbling TSMC's profit margin up as a way of saying, "Don't do this again, it wasn't profitable."