Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) listed the challenges of ensuring export control compliance by its customers, months after the company’s artificial intelligence (AI) silicon was found to have flowed to US-sanctioned Huawei Technologies Co (華為) via intermediaries.
“TSMC’s role in the semiconductor supply chain inherently limits its visibility and information available to it regarding the downstream use or user of final products that incorporate semiconductors manufactured by it,” the Hsinchu-based company said in its latest annual report released on Friday.
The world’s largest contract chipmaker said the constraint impedes its ability to prevent unintended end-uses of its semiconductors, as well as diverted shipments by business partners and third parties intent on circumventing sanctions.
Photo: Ann Wang, Reuters
In terms of whether there are going to be compliance issues found, the go-to chipmaker for Apple Inc and Nvidia Corp in the report said there is “no assurance,” despite TSMC’s best efforts to abide by relevant export control regulations.
TSMC provides manufacturing services to many so-called fabless firms and chip designers, including Nvidia. Very often, the semiconductors it customizes for those companies end up being incorporated in gadgets and devices made by third parties, most often for legitimate purposes.
For instance, Qualcomm Inc and MediaTek Inc (聯發科) work with TSMC to make mobile chips used by phone makers, including Xiaomi Corp (小米).
However, an investigation by Canada-based research firm TechInsights last year showed that Huawei’s Ascend 910B AI chip contained semiconductors by TSMC.
The chipmaker halted shipments to a client at about the same time after it found out the semiconductors it made for the customer ended up with Huawei.
TSMC alluded to the incident in the annual report and said it notified Washington and Taipei in October last year that a chip it made for a customer might have been diverted to a restricted entity.
The chipmaker added that it has been cooperating with authorities’ requests for additional information and documents.
US President Donald Trump’s administration has followed the footsteps of former US president Joe Biden in curbing the flow of advanced technologies to China out of national security concerns.
The US earlier this month unveiled a fresh round of regulations to tighten China’s access to advanced AI chips.
Earlier this year, Washington called for chip producers like TSMC and Samsung Electronics Co to step up their scrutiny and due diligence of customers, especially Chinese firms. US officials simultaneously blacklisted 16 Chinese companies including Sophgo Technologies Ltd (算能科技), which was allegedly involved in Huawei getting access to TSMC chips last year.
Together with Sophgo, the US also added PowerAir Pte Ltd to the entity list after the South China Morning Post reported concerns about the Singapore-based company’s possible involvement in diverting TSMC chips to Huawei.
CAUTIOUS RECOVERY: While the manufacturing sector returned to growth amid the US-China trade truce, firms remain wary as uncertainty clouds the outlook, the CIER said The local manufacturing sector returned to expansion last month, as the official purchasing managers’ index (PMI) rose 2.1 points to 51.0, driven by a temporary easing in US-China trade tensions, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. The PMI gauges the health of the manufacturing industry, with readings above 50 indicating expansion and those below 50 signaling contraction. “Firms are not as pessimistic as they were in April, but they remain far from optimistic,” CIER president Lien Hsien-ming (連賢明) said at a news conference. The full impact of US tariff decisions is unlikely to become clear until later this month
With an approval rating of just two percent, Peruvian President Dina Boluarte might be the world’s most unpopular leader, according to pollsters. Protests greeted her rise to power 29 months ago, and have marked her entire term — joined by assorted scandals, investigations, controversies and a surge in gang violence. The 63-year-old is the target of a dozen probes, including for her alleged failure to declare gifts of luxury jewels and watches, a scandal inevitably dubbed “Rolexgate.” She is also under the microscope for a two-week undeclared absence for nose surgery — which she insists was medical, not cosmetic — and is
GROWING CONCERN: Some senior Trump administration officials opposed the UAE expansion over fears that another TSMC project could jeopardize its US investment Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is evaluating building an advanced production facility in the United Arab Emirates (UAE) and has discussed the possibility with officials in US President Donald Trump’s administration, people familiar with the matter said, in a potentially major bet on the Middle East that would only come to fruition with Washington’s approval. The company has had multiple meetings in the past few months with US Special Envoy to the Middle East Steve Witkoff and officials from MGX, an influential investment vehicle overseen by the UAE president’s brother, the people said. The conversations are a continuation of talks that
CHIP DUTIES: TSMC said it voiced its concerns to Washington about tariffs, telling the US commerce department that it wants ‘fair treatment’ to protect its competitiveness Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday reiterated robust business prospects for this year as strong artificial intelligence (AI) chip demand from Nvidia Corp and other customers would absorb the impacts of US tariffs. “The impact of tariffs would be indirect, as the custom tax is the importers’ responsibility, not the exporters,” TSMC chairman and chief executive officer C.C. Wei (魏哲家) said at the chipmaker’s annual shareholders’ meeting in Hsinchu City. TSMC’s business could be affected if people become reluctant to buy electronics due to inflated prices, Wei said. In addition, the chipmaker has voiced its concern to the US Department of Commerce
RSS