The U.S. Commerce Department has reportedly launched an investigation into Taiwan Semiconductor Manufacturing Company Co. Ltd. TSM that could potentially disrupt the production of chips for Apple Inc.’s AAPL iPhones and Macs.
What Happened: The U.S. Commerce Department is probing whether TSMC violated sanctions by supplying chips to Huawei Technologies, reported Apple Insider (via The Information).
The investigation, initiated in early fall, follows suspicions that TSMC may have been contracted by an intermediary firm to manufacture smartphone and AI chips for Huawei.
The 2020 sanctions on Huawei restricted the Chinese tech giant from obtaining components from U.S. companies without approval from the Commerce Department.
It also prohibited the use of chips manufactured with U.S.-sourced equipment.
See Also: Trump Campaign’s Snapchat Absence Potentially Gives Harris Edge Among Young Voters
If found guilty, TSMC could face penalties, including sanctions, which could directly affect its chip production for clients, including Apple, the report noted.
Such a penalty could stop TSMC’s access to U.S. technology and equipment, disrupting the production of new lines and maintenance of existing ones.
This could also limit the production of Apple’s mobile chips, forcing the tech giant to seek another chip partner.
Subscribe to the Benzinga Tech Trends newsletter to get all the latest tech developments delivered to your inbox.
Why It Matters: Earlier this week, it was reported that TSMC could resist price hikes from equipment supplier ASML Holding, which may lead to a pricing standoff between the two companies.
Hsinchu, Taiwan-based TSMC reported third-quarter revenue of NT$759.69 billion ($23.50 billion), up 39% from last year and 12.8% from the previous quarter. In U.S. dollar terms, revenue grew 36% year-over-year and 12.9% quarter-over-quarter.
The impact could be even greater, as TSMC’s Arizona facility, which secured a $6.6 billion subsidy through the Chips Act from the Commerce Department in April, might face a halt in its development.
Previously, it was also reported that TSMC has started manufacturing A16 chips for Apple at its Phoenix, Arizona facility, marking a return to using U.S.-made chips after nearly a decade.
Check out more of Benzinga’s Consumer Tech coverage by following this link.
Read Next:
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo courtesy: Shutterstock
Market News and Data brought to you by Benzinga APIs
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
