TSMC Faces a $1 Billion Fine for Selling Semiconductors in Violation of US Restrictions

TSMC (Taiwan Semiconductor Manufacturing Company) is facing a huge fine from the US government. This fine, which could be more than $1 billion, has been imposed due to TSMC’s sale of semiconductors that broke the rules on accessing Chinese technology. The US Department of Commerce claims that TSMC made chips in violation of these restrictions.

The Controversial Chips

It seems that TSMC produced chips that were later used in the Huawei Ascend 910 AI accelerators. These events took place in 2023 when TSMC received orders from Sophgo, a partner of Bitmain. The chips were made using advanced processes that included billions of transistors, which broke the restrictions. The violation was discovered when one of the Huawei Ascend 910 accelerators was taken apart.

TSMC’s Response

However, TSMC didn’t know the purpose of the order at the time. When they found out, they immediately stopped the shipments and informed the US Department of Commerce. As a result, Sophgo was also added to the list of companies banned from accessing US technology. Furthermore, it’s reported that Huawei received 2 million chips for the Ascend 910B from “shell companies” that managed to bypass the restrictions by placing orders with TSMC. These companies couldn’t make these chips locally in a reliable and cost-effective way.

To avoid further issues, TSMC must improve its checks on new customers and their orders to prevent similar problems in the future, even if they were misled.