Why TSMC Could Be Heavily Fined

TSMC faces a fine of more than $1 billion. Photo: Bloomberg .

The US Department of Commerce is investigating Taiwan Semiconductor Manufacturing Co (TSMC) for its support of chip manufacturing for Huawei products.

The US Commerce Department is looking into the relationship between TSMC and Sophgo, a company based in China. According to sources, components manufactured by TSMC for Sophgo are identical to chips integrated into Huawei's high-end Ascend 910B AI processor. The phone company is on the US's restricted entity list due to allegations related to sanctions violations and trade secret theft.

According to expert Lennart Heim from the RAND Center for Technology, Security and Policy (USA), TSMC has produced about 3 million chips based on Sophgo's design in recent years, and it is highly likely that some of them have ended up in the hands of Huawei.

TSMC’s use of US technology to manufacture chips means that its Taiwan-based factories are also subject to Washington’s export controls, meaning that TSMC cannot manufacture chips for Chinese companies like Huawei without a US export license.

TSMC should not have agreed to manufacture chips for a Chinese company, especially if the product line was at risk of being distributed to Huawei, Heim said. The potential fine could be double the value of the transactions in violation, according to current US Commerce Department regulations.

TSMC’s US-listed shares fell slightly after rising nearly 3% in the previous trading session following the news. Although Taiwanese semiconductors have not yet been subject to tariffs, President Trump said his administration is considering expanding tariffs to the industry.

Earlier in March, TSMC announced plans to invest an additional $100 billion in the US, including building five more chip manufacturing facilities in the coming years.

The next steps by the US administration are unclear at this time, but senior officials said they are considering tougher penalties for violations of export regulations.

Source: https://znews.vn/tsmc-sap-bi-trung-phat-post1544726.html