The US Department of Commerce has launched an investigation into alleged violations of sanctions against China by TSMC, a key supplier of microchips to Apple.
Points of attention
- The US Department of Commerce is investigating potential sanctions against TSMC, a major supplier of microchips to Apple, due to alleged violations of sanctions against China.
- Sanctions against TSMC could have far-reaching consequences for the global technology industry, including Apple, as TSMC is a key manufacturer of advanced microcircuits in the world.
- The threat of sanctions against TSMC stems from suspicions of its involvement in supplying Huawei with microcircuits made using American technology, potentially violating export control regulations.
- If TSMC faces sanctions or restrictions on access to US technologies, it could impact over a hundred companies worldwide, such as Apple, that rely on TSMC for advanced chips in their devices.
- The investigation into TSMC's activities could have significant implications for the future of the technology industry, with Google considering TSMC for manufacturing its next processor for the Pixel 10.
What is known about the threat of sanctions against TSMC from the US government
It is noted that the investigation began against the background of suspicions about the sudden recovery on the market of the Chinese company Huawei, which, bypassing the sanctions imposed by the US government against China, could receive microcircuits from TSMC.
If the US imposes sanctions against TSMC, hundreds of technology companies around the world will face negative consequences, including Apple, which uses 2-nanometer processors in its iPhones and other devices.
Currently, TSMC is one of the key manufacturers of advanced microcircuits in the world and possesses today's most advanced microchip manufacturing technology, ahead of competitors from Korea, Japan, the United States and other countries.
TSMC's chips are used in household appliance brands, automobiles, smartphones and other electronic devices, as well as in military development.
TSMC is literally irreplaceable, and that's why it's so important.
US sanctions against Huawei were introduced at the end of Donald Trump's first presidential term in 2019 and are still in effect.
This applied to a number of different technologies, including American-made 5G chips, which were gaining popularity at the time.
Due to the lack of access to these technologies, Huawei lost the opportunity to produce top smartphones and almost went bankrupt.
However, even in the face of sanctions, Huawei already released a top-of-the-line Mate 60 device with 5G support in 2023.
After that, the company announced plans to build a whole network of factories for the production of 5G processors.
This was surprising, because Chinese companies did not have the technology to produce such advanced microchips.
Numerous investigations began, which first showed that the new chips were not made on a 5-nanometer process, but on a 7-nanometer one, and then — that they could not be mass-produced at the moment.
Suspicions arose very quickly that someone helped Huawei in such a breakthrough. This was confirmed in October 2023, when Bloomberg published an article with a list of companies that helped the Chinese.
At the time, sources said that TSMC was not involved in any way, although the four names that were released by journalists also originated from Taiwan. It seems that this did not convince the US government, so the authorities opened an investigation.
What TSMC suspects
According to The Information , the manufacturing company is suspected of supplying Huawei microcircuits that were manufactured using American technology.
The chips were allegedly used, in particular, for the development of artificial intelligence and the development of 5G technology, which could be a violation of export control rules.
If the chips did come from TSMC, it's likely that the orders were placed in the name of intermediary companies, but the chipmaker is required to conduct due diligence to establish the identity of the end user. The investigation will determine whether TSMC did this.
If the suspicions are confirmed, the company will be subject to sanctions at best, and at worst — its access to American technologies will be restricted.
This will affect the ability of more than a hundred companies around the world, including Apple, to use advanced chips in their own devices.
Google wants to manufacture its next processor for the Pixel 10 at TSMC, moving away from cooperation with Samsung.
