TAIPEI (Taiwan News) — Taiwan Semiconductor Manufacturing Co. (TSMC) halted supply to a client after discovering that one of its chips provided to the company was used in a Chinese Huawei product.
In mid-October, TSMC opened an investigation after learning its chips were found in a Huawei product, Reuters reported. Shipments have been suspended to the client, a Taiwanese trade and economic official said, speaking on the condition of anonymity due to the situation’s sensitivity.
The official did not provide the client's name, and TSMC declined to comment. It was an "important warning event" within TSMC, the official said.
The official said the earliest the incident can be traced back to is Oct. 11. The TSMC chip was found within a multi-chip system after tech research firm TechInsights took apart Huawei’s advanced Ascend 910B AI chip.
TSMC notified the Taiwanese government and the US Commerce Department, as the chip could reveal a possible violation of export restrictions on Huawei. In May 2019, the US Commerce Department blacklisted Huawei by placing it on the “Entity List,” and restrictions were expanded in 2020 to block foreign sales of chips to the company.
TSMC said it stopped supplying chips to Huawei in September 2020. Huawei said in a statement that it had not produced chips through TSMC since the US introduced new rules in 2020.
It is uncertain how Huawei obtained the TSMC chip. The discovery shows the difficulty enforcing export controls and Huawei's need for sophisticated chips.
In 2019, Huawei released its Ascend 910 chip series. Two sources told Reuters that before US export controls were implemented, TSMC made them.
However, reports said that Chinese entities have attempted to circumvent the restrictions and have used cloud services provided by companies like Amazon to access chips.
