Overview
- The U.S. Department of Commerce is investigating TSMC for allegedly supplying chips, via Sophgo, that ended up in Huawei's AI processors, violating export control regulations.
- TSMC could face a fine exceeding $1 billion, calculated as up to twice the value of transactions deemed to have violated U.S. rules.
- Since late 2024, TSMC has suspended shipments to Sophgo and maintains it has not supplied Huawei directly since September 2020, emphasizing its compliance with U.S. laws.
- President Trump has threatened TSMC with tariffs as high as 100% if it does not expand its U.S. manufacturing footprint, prompting the company to announce a $100 billion investment in new American facilities.
- This case highlights escalating U.S.-China tensions over technology access and trade, with stricter enforcement of export controls and broader tariff strategies targeting the semiconductor industry.