TSMC Suspends Shipments Due to Chip Discovery

TAIPEI (Reuters) – Taiwan Semiconductor Manufacturing Co (TSMC) has halted shipments to a customer after discovering that one of its chips was found in a Huawei product, according to a Taiwanese official familiar with the situation.

Investigation Initiated

About two weeks ago, TSMC suspended shipments and began an investigation. The official, speaking anonymously due to the delicate nature of the issue, mentioned that this incident was deemed an "important warning event" within TSMC, tracing back to October 11.

Communication with Governments

The unnamed client involved has not been disclosed, and TSMC has declined to comment. However, TSMC informed U.S. and Taiwanese governments of the situation following a report from TechInsights, which revealed TSMC's chip inside a Huawei product, potentially violating U.S. export restrictions.

U.S. Export Controls

The U.S. government imposed limits on the export of advanced AI chips to China two years ago to hinder the Chinese military's capabilities. Huawei has been a significant focus of these restrictions, as the U.S. seeks to prevent Chinese firms from accessing advanced semiconductor technology.

Despite these efforts, Chinese entities continue to find ways around the restrictions, utilizing cloud services from companies like Amazon to procure advanced U.S. chips and AI technologies.

Taiwan's Standpoint

Taiwan has implemented its own export controls to impede advanced chips from being produced in China, and officials maintain a serious commitment to adhering to U.S. regulations amid growing tensions with their large neighbor.