TSMC is facing a $1 billion penalty from the US Department of Commerce after their chips were found in Huawei’s Ascend 910B AI chip last year. The chip was sold to Sophgo, which then shipped it to Huawei to circumvent the US’s technology barriers.
Under TSMC’s agreed export controls, the US Department of Commerce can impose penalties of up to twice the value of the trade if it is violated. Immediately after their chips were detected in the Ascend 910B, TSMC itself reported it to the Department of Commerce to avoid harsh action.
The technology war between China and the US that began 5 years ago is now heating up after President Trump announced a 104% tariff yesterday. Under the existing barriers, Huawei not only cannot access TSMC’s foundry, they also cannot buy ASML’s chip-making machines.
Huawei is now reportedly modifying ASML’s old machines to produce 5nm chips with the help of SMIC but at a higher cost. The future of this machine is also bleak because ASML no longer offers technical assistance and spare parts to comply with American directives.