The Taiwan giant claims that it has limited control over the end-users of the semiconductors, implying that we can see more of the firm's chips ending up in China.
TSMC Believes It Has "Limited Control" Over The Supply Chain & The End Users of Its Cutting-Edge Chips
Well, TSMC did get media attention when it was reported that the company's chips managed to end up on Huawei's AI chips, and the Taiwan giant did say that these chips were exported to the company before regulations came in. However, the TSMC-Huawei fiasco did make it clear that there are loopholes within the supply chain, which countries like China have managed to capitalize on completely. And now, in a report by the Taipei Times, TSMC, in its annual report, claims that the firm has "limits" in knowing about the users to whom it exports its semiconductors, suggesting that a Huawei-like incident can surface at any time.
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.
- TSMC
TSMC is more of a "chip-service" company, which means it provides manufacturing services to fabless firms like NVIDIA and Apple. Many of these companies have products that manage to end up in markets like China, allowing individuals/entities to leverage this. Similar was the case with Huawei's Ascend 910B chips, where TSMC sold its semiconductors to a company that then dealt with Huawei, so the supply chain is something that the Taiwan giant cannot keep track of. China is such a huge market that it is challenging to keep sidelined, which is why we are seeing so many incidents of export regulations being bypassed.
The Trump administration is currently engaged in limiting China's access to AI chips, part of which involves acquiring an "export license" and limiting the number of chips being sold to a particular nation. Moreover, the government is also involved in patching the loopholes by further scrutinizing exports to countries like Singapore, Malaysia, and India, to ensure that the chips don't end up in China or any China-linked organization. While these efforts will surely make an impact, it won't be easy to keep China and other hostile nations deprived of cutting-edge technology.
About the author: Muhammad Zuhair is a hardware and technology reporter for Wccftech, specializing in the semiconductor industry and the complex interplay between technology, manufacturing, and geopolitics. His coverage focuses on the corporate strategies and technological roadmaps of industry giants like TSMC, NVIDIA, Samsung, and Intel. Zuhair's expertise lies in deconstructing complex topics such as fabrication nodes (e.g., 2nm process), the economic impact of policies like the CHIPS Act, and the strategic development of AI infrastructure from NVIDIA, AMD and Intel.
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