Exclusive: TSMC could face $1 billion or more fine from US probe, sources say

Karen Freifeld - Reuters - 08/04
Taiwan Semiconductor Manufacturing could face a penalty of $1 billion or more to settle a U.S. export control investigation over a chip it made that ended up inside a Huawei AI processor, according to two people familiar with the matter.
  • TSMC made chips for China's Sophgo that matched Huawei's
  • TSMC may have violated export control regulations in filling orders-sources
  • Companies can be fined up to twice the value of transactions for prohibited conduct
  • It is unclear how and when the matter may be resolved
April 8 (Reuters) - Taiwan Semiconductor Manufacturing (2330.TW), opens new tab could face a penalty of $1 billion or more to settle a U.S. export control investigation over a chip it made that ended up inside a Huawei AI processor, according to two people familiar with the matter.
The U.S. Department of Commerce has been investigating the world's biggest contract chipmaker's work for China-based Sophgo, the sources said. The design company's TSMC-made chip matched one found in Huawei's high-end Ascend 910B artificial intelligence processor, according to the people, who requested anonymity because they were not authorized to speak publicly about the matter.

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Huawei -- a company at the center of China's AI chip ambitions that has been accused of sanctions busting and trade secret theft -- is on a U.S. trade list that restricts it from receiving goods made with U.S. technology.
TSMC made nearly three million chips in recent years that matched the design ordered by Sophgo and likely ended up with Huawei, according to Lennart Heim, a researcher at RAND's Technology and Security and Policy Center in Arlington, Virginia, who is tracking Chinese developments in AI.
The $1 billion-plus potential penalty comes from export control regulations allowing for a fine of up to twice the value of transactions that violate the rules, the sources said.
Because TSMC's chipm...
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