Taiwan's TSMC, the world's largest foundry (semiconductor contract manufacturing) corporations, faces the risk of incurring a $1 billion (approximately 1.5 trillion won) fine for selling products to an ordering company of China's Huawei, which is subject to U.S. government sanctions.
On the 9th (local time), Reuters reported this, citing sources. The U.S. Department of Commerce has been investigating since last year after finding chips manufactured by TSMC in Huawei's artificial intelligence (AI) semiconductor 'Ascend 910B,' which turned out to have been ordered by the Chinese semiconductor design company Sofgo on behalf of Huawei.
According to Renat Heim, a researcher at the technical security policy center of the U.S. think tank Rand Corporation, TSMC has produced nearly 3 million chips tailored to orders from Sofgo in recent years, which likely ended up with Huawei. He noted, 'The design is for AI, and TSMC should not have manufactured chips for a company headquartered in China, particularly given the risks of it ending up with a restricted enterprise like Huawei.'
Huawei is listed on the sanctions list established by the U.S. Department of Commerce. Without U.S. government approval, transactions involving advanced technologies or products containing U.S. technology cannot occur, and since TSMC's chip manufacturing facilities incorporate U.S. technology, TSMC must comply with these sanctions.
In the event of a sanctions violation, fines can be imposed up to twice the value of the transaction. As a result, a fine of $1 billion has been mentioned. However, it is not yet disclosed whether TSMC will actually receive a fine. The U.S. Department of Commerce declined to comment, and TSMC only responded, 'We have not supplied products to Huawei since mid-September 2020 and are cooperating with the U.S. Department of Commerce.'
As the trade war between the U.S. and China intensifies, pressure on TSMC is also increasing. U.S. President Donald Trump stated the previous day at a Republican National Committee event that TSMC would face 'up to 100% tariffs' if it did not build factories in the U.S. Additionally, the U.S. plans to impose separate tariffs on individual items such as semiconductors, which would also be critical for TSMC.