TSMC, the global leader in semiconductor manufacturing, might possibly have to pay over $1 billion. according to Reuters This statement references "two individuals acquainted with the situation... who chose to remain anonymous as they weren't permitted to discuss this issue openly." Even though $1 billion doesn’t significantly impact TSMC, it’s still far from being an insignificant amount of money.
This penalty is expected to come in the form of a settlement that the leading semiconductor firm must make following what was said to be an inquiry conducted by the U.S. Department of Commerce regarding potential violations of export regulations through the production of components destined for use by the Chinese corporation Huawei.
Towards the end of last year, TSMC allegedly notified the US that a Huawei device (the Ascend 910B AI processor) included a TSMC chip. Shortly thereafter, the government Establish a computer architecture firm named Sophgo On the ominously titled "Entity List" for serving as a middleman between TSMC and Huawei, potentially unbeknownst to TSMC.
Huawei had previously been included on this list, which meant U.S. companies needed a license for exports to Huawei. Now, the same licensing requirement applies to exports to Sophgo as well. TSMC must comply with these rules since certain machinery and tools used in their operations originate from the United States.
If these sources are correct, it looks like the US government has been investigating the matter and might have found TSMC to be in breach of these export restrictions. Though, of course, even if the company was in breach, it might not have been intentional.
As per Reuters’ information, the penalty exceeding one billion dollars “stems from export control regulations that permit a fine of up to double the worth of transactions which breach these guidelines.”
According to TSMC's Nina Kao, the company hasn't given Huawei anything since 2020. The $1+ billion fine could apparently be in the form of a "charging letter" that would give the company time to respond—so even if the sources are correct, it looks like it might not be a done deal just yet.
Speaking more broadly, now, although TSMC might have recently declared $100 billion in investments for the USA , this doesn't put it beyond the reach of export restrictions. And Trump's recent strong-arm diplomacy certainly shouldn't give TSMC any ideas otherwise.
We need to await an official statement from either the U.S. Commerce Department or TSMC before we can confirm anything definitively.
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