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The Taiwan Semiconductor Manufacturing Company (TSMC) has cut off ties with a Singaporean chip company after an investigation revealed that the latter firm had shipped products to Chinese technology giant Huawei. The report comes from the South China Morning Post, and it quotes three sources to share that a TSMC chip was discovered in a Huawei AI processor, which led to a review and subsequent action by TSMC against the firm PowerAIR. US sanctions against Huawei prevent the Chinese firm from procuring advanced chips manufactured by relying on US technology due to national security concerns that they might be used to harm American interests.
TSMC Continues To Root Out Chips Making Their Way To Huawei
Despite US sanctions against Huawei, multiple reports have suggested that some of TSMC's advanced chips continue to make their way to the Chinese technology giant. Restrictions against Huawei have become more important in today's era of AI driving the semiconductor industry, and against this backdrop, TSMC appears to have increased its scrutiny of chips heading to China.
A fresh report from the South China Morning Post, which quotes three sources, suggests that the Taiwanese fab has cut off business ties with a Singaporean chip company over concerns that its chips ended up in Huawei's products. The firm, according to the SCMP, is a small-time player called PowerAIR. PowerAIR came on TSMC's radar after a TSMC chip was discovered in a Huawei AI processor.
The sanctions against Huawei, which intensified during the Biden Administration, have also led to reports of Huawei relying on several methods to procure advanced chip manufacturing technology and talent. Since it cannot access advanced chips made with US-origin technology, the Chinese firm relies on China's Semiconductor Manufacturing International Corporation (SMIC) for its chip needs. SMIC too is sanctioned from acquiring the latest equipment, with multiple reports suggesting that the sanctions have hampered its ability to manufacture chips with the 7-nanometer or lower technology nodes.
A November report in the Financial Times shared a TSMC statement clarifying that the chips were found in Huawei's Ascend 910B processor were shipped before the American sanctions covering them came into effect. The statement followed a teardown of the chip, which revealed the TSMC-made components inside it.
Another report claimed that Huawei had stepped up its efforts to poach TSMC engineers by offering them triple salaries and other perks. Huawei's efforts have also purportedly targeted the Dutch firm ASML's suppliers. ASML is the only firm in the world capable of manufacturing the advanced machines that make the latest chips, and its suppliers, such as the lens manufacturer Zeiss, are key components of the supply chain.
Constraints that prevent China's SMIC from acquiring EUV chip machines have forced it to use complex techniques such as multi-patterning to make the latest chips. These reduce the overall quality of the products and increase manufacturing costs which places SMIC on the back foot against other chip manufacturers.
About the author: Ramish is a seasoned technology writer and editor with more than a decade of experience. He specializes in semiconductor fabrication and market analysis. With a background in finance and supply chain management - via his bachelors in Finance and a micromasters in supply chain management from MIT - Ramish combines financial rigor with deep industry insight to deliver accurate and authoritative coverage.
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