TSMC suspends supply to this customer after discovering its Huawei 'connection', here’s what the company said

Taiwan Semiconductor Manufacturing Co (TSMC) has reportedly halted shipments to a customer. According to a report by the news agency Reuters, the chip manufacturer made this decision after discovering that chips it produced for them ended up in Huawei Technologies products, potentially violating US sanctions. The chipmaker has already notified both US and Taiwanese authorities and is conducting an investigation for the same, the report suggested citing an official (who remained anonymous) familiar with the situation.
However, the report didn’t reveal whether the alleged TSMC client knowingly supplied the chips to Huawei or where it's based. Earlier this month, TSMC notified US officials of a potential violation of export restrictions after TechInsights, a tech research firm, discovered one of TSMC's chips inside a Huawei product..
TSMC, a major supplier of chips to Apple and other tech giants, is prohibited from directly supplying Huawei due to US sanctions that are aimed at curbing the Chinese tech giant's access to advanced technology.

In an emailed statement to Bloomberg, TSMC said: “TSMC is a law-abiding company, and we are committed to complying with all applicable rules and regulations, including applicable export controls. We proactively communicated with the US Commerce Department regarding the matter in the report. We are not aware of TSMC being the subject of any investigation at this time.”

TSMC's discovery of its chips in Huawei's AI servers raises concerns about how the Chinese tech giant obtained the advanced semiconductors despite US sanctions. Huawei, blacklisted since 2020, is barred from doing business with TSMC without a US license.
While Huawei has relied on SMIC, a local partner, for chip production, questions remain about SMIC's capabilities. TSMC claims it has not supplied Huawei since 2020, but the presence of its chips in Huawei's latest products suggests potential loopholes in the sanctions.
Earlier this year, another Reuters report suggested that some Chinese entities have found ways to access advanced US chips and AI technology by using cloud services offered by companies like Amazon, despite the sanctions.