Investing.com– The U.S. Commerce Department has launched a probe into TSMC (NYSE:TSM) over whether the chipmaking giant breached export rules by making smartphone or artificial intelligence chips for China’s Huawei, The Information reported on Thursday.
The department had contacted TSMC in recent weeks to enquire over any production for Huawei, the report said.
TSMC said in a mailed statement it is a “law abiding company,” and that it has processes in place to ensure compliance.
Huawei was blacklisted by the U.S. in 2020 over national security concerns, blocking it from buying chips made using American equipment. The restrictions also prevent Huawei from making its own chips using U.S. technology without approval from the Commerce Department.
Recent bipartisan efforts by U.S. politicians have attempted to block Huawei entirely from buying American chipmaking equipment, over its ties to the Chinese military.
Huawei has so far claimed all its advanced chips are sourced from China’s Semiconductor Manufacturing International Corp (HK:0981)- the country’s biggest chipmaker. It had last year launched a phone with an advanced 7-nanometer chip made by SMIC, with the processor lauded as a major breakthrough for Chinese firms.
Beyond Huawei, the U.S. had over the past two years introduced strict curbs blocking Chinese companies from accessing the most advanced AI chips and technology. Firms such as NVIDIA Corporation (NASDAQ:NVDA), which make the most cutting edge AI chips, cannot sell them to China.
TSMC is the world’s biggest contract chipmaker and is a key player in the chip supply chain. It is a key supplier of advanced chips used in the AI and smartphone industries. Earlier this week, the firm clocked stronger-than-expected third-quarter earnings on robust AI-fueled demand for chips.