TSMC is currently the largest semiconductor manufacturer in the world. Many big players in the tech industry rely on its factories, especially for flagship products, as they offer the most efficient and reliable production processes. However, it seems that companies in China will have to forget about getting chips manufactured by TSMC for AI hardware.
The discovery that Huawei used chips made in TSMC’s factories sparked a significant controversy in the United States in October. Huawei is one of the companies sanctioned by the US government. This prevents them from obtaining technologies from American companies, whether hardware or software. However, TechInsights, a Canadian research firm, warned TSMC that they found chips manufactured by them in Huawei hardware.
TSMC reportedly canceling AI chip manufacturing for Chinese companies due to ‘Huawei incident’
More specifically, TechInsights found TSMC-manufactured chips in Huawei’s AI accelerators. TSMC notified the US government of the situation so that they could start an investigation and take appropriate measures. Now, with the controversy still relatively fresh, TSMC has canceled the production of AI chips for clients in China, according to the Financial Times. With this, the company may want to show that they are “not acting against US interests.”
TSMC’s alleged move could seek to avoid any kind of sanction from the US government. Essentially, it appears to be a gesture of “goodwill” to demonstrate that they were unaware of the situation. They may also want to show that their priority is to maintain good relations with the US government rather than with China. Meanwhile, recent reports suggest that Huawei is luring TSMC engineers with astronomical salaries to “switch sides.”
Trump’s arrival to the presidency could have been the driving force behind the decision. The new US president will uphold a protectionist economic policy, positioning China as the “trade enemy.” This means that Trump will not hesitate to implement tariffs on products and technologies from Chinese companies. He could also push for new trade restrictions, just as he did in his previous term.
TSMC continues to investigate the situation
Meanwhile, TSMC continues to investigate the incident. However, the company claims that it has also cut ties with the company through which Huawei allegedly obtained its chips. TSMC’s reported move could seriously affect the plans of big Chinese companies in the AI field. This includes Baidu, which was reportedly planning to use chips made by TSMC for artificial intelligence-based developments.
