This development underlines increasing tensions between global tech giants and the U.S. government. Taiwan Semiconductor Manufacturing Company recently informed U.S. authorities about the production of a chip that was found inside a Huawei device. That’s in addition to a teardown analysis conducted by one of the world’s top technology research firms – TechInsights – that has also discovered the same chip inside a Huawei product. This news from TSMC is quite important because the U.S. had banned Huawei for almost three decades, and the company itself is usually considered at the epicenter of the U.S.-China tech rivalry.
History of Sanctions by U.S. Against Huawei and the Technological Restraints Faced
Huawei has been put through intense sanctions by the U.S. since 2019, which have also included the revocation of access to advanced technologies, in particular, semiconductors that are considered a constituent part of contemporary devices including smartphones and AI systems. The sanctions were only one element of the entire plan to effectively prevent Huawei from getting cutting-edge technology from American firms and other producers worldwide that use U.S. technology. Curiously, after the sanctions were imposed, TSMC-the world’s largest contract chip manufacturer—was suddenly forbidden to distribute its chips to Huawei because its processes depend on the use of U.S. technologies.
The TechInsights Find
TechInsights, who have focused on hardware depth analysis, disassembled a Huawei product that included a chip made on TSMC’s 5-nanometer process which, at the time of its finding in 2023, was very interesting and especially within the U.S. government circles. The incident has gained more scrutiny on how Huawei possibly bypassed all of the sanctions imposed upon it and managed to integrate the latest technology used in the most cutting edge form into its products. The specific device under review here, known as the Huawei Mate 60 Pro, was pitched as a flagship model and certainly offered plentiful technological advancements which appear to have at least marginally sidestepped some of the roadblocks caused by U.S. export controls.
According to reports, the information obtained by TechInsights brought the issue to the attention of the U.S. government. The chip involved is the Kirin 9006C, which TSMC made back in 2020. This means that the chip could have come within the period when U.S. sanctions were tightening on Huawei. Later, this contradicts the prior reasoning that indicated Huawei had finally switched the supply from TSMC to depend solely on Chinese suppliers, such as Semiconductor Manufacturing International Corporation.
TSMC Compliance and U.S. Action
Responding to the finding by TechInsights, TSMC foresees the question and has actually already disclosed, to the U.S. government, the presence of one of its chips in a Huawei device. The company again asserts its adherence to all U.S. export controls and regulations and states that it had stopped shipping chips to Huawei upon the inclusion of the sanctions in 2020. The company said that the Huawei device containing the chip was prior to all of these restrictions coming into full effect.
The investigation into the case has reportedly been launched by the U.S. Department of Commerce, focusing on whether there were some violations of export controls. It falls under the larger efforts of the U.S. to tighten the enforcement for sanctions on technology transfer, aimed at preventing companies like Huawei from avoiding these restrictions through indirect supply chains or stockpiling parts prior to sanctions.
Implications for the Tech Industry
This makes enforcement of export controls in a globally sourced supply chain problematic. Companies like TSMC have stated they plan to comply with U.S. law, but given the long lead times and intrinsically global nature of chip manufacturing, chips produced before sanctions may well end up in restricted markets. It marks a technological win on the part of Huawei and a new challenge as it gets drawn into further scrutiny by U.S. authorities in relation to its chip discovery.
For TSMC, the case brings to the fore the high-wire balancing act it must walk in its relationship with China, an important market for the business, and strictly U.S. rules. TSMC, or Taiwan Semiconductor Manufacturing Co., is the world’s largest contract chipmaker and sits at the heart of the global technology supply chain; every one of its moves will be closely watched by both the governments and the tech industry.
This incident falls into the larger context of U.S.-China tech tensions where both vie for control over sensitive sectors like the semiconductors. The next steps taken by the U.S. government will be defined in regards to current export controls as well as sanction enforcement and international collaboration on tech products.
This is just the kind of case that shines a light on challenges from managing supply chains across geopolitical boundaries and probably will keep companies on their toes as they navigate an increasingly fraught landscape in the U.S.-China technology relationship.
