Taiwan Semiconductor Manufacturing Company suspended shipments to China-based chip designer Sophgo after a chip it made was found on a Huawei AI processor, according to two people familiar with the matter.
Sophgo had ordered chips from TSMC that matched the one found on Huawei’s Ascend 910B, the people said. Huawei is restricted from buying the technology to protect U.S. national security. Reuters could not determine how the chip ended up on the Huawei product.
Tech research firm TechInsights discovered the TSMC chip on Huawei’s Ascend 910B when it took apart the multi-chip processor, a different source told Reuters on Tuesday. Alerted to the finding, about two weeks ago TSMC notified the U.S., the source said.
How do US restrictions factor in here? TSMC is a Taiwanese company with only one operational plant in the US, the majority are in Taiwan, China, and Japan.
The US is the primary military force protecting Taiwan, by treaty. That’s likely why.
And The US is A very big market and TSMC exports a lot of chips into the US.
They could ignore sanctions but that would mean they’d be sanctioned as well. Pretty much every manufacturer and financial institution has to obey laws in multiple jurisdictions if they want to operate within those markets.
Would the USA actually sanction TSMC though? Wouldn’t that be a massive blow to companies like apple?
They need asml lithography equipment without which they are a nothing burger and to get that you need to play nice with US and EU.
Lithography but also clients like Apple, Intel, AMD and so on. Without them they’re also toast. World today is so interconnected that at large scale it’s really hard not to be compliant with sanctions.
You are forgetting that Taiwan has an interest in supporting the U.S. led sanctions.
People talk about Apple only but every competitive chip designer (which Intel is not) depends on TSMC, so they all get set back.
But TSMC gets to close, and what’s more dangerous for the political stability of Taiwan is that since they don’t have oil they lose West military protection.
Your friend knows a secret recipe for the best chocolate chip cookies. Your mother owns the best ovens in town.
Your friend cuts a deal with your mother to use her oven exclusively. Your mother agrees knowing she’ll get to charge your friend every time they use the ovens.
This is like that. The main value is in the design (recipe). Modern foundry’s are also complex and difficult to operate affordably, but they exist all over the planet. It’s ultimately the partnerships that makes it all possible.
Not all foundries are the same. Taiwan is leading the way for quite a long time.
There’s a lot of money in both intellectual property and physical manufacturing. Trying to do an analogy with software is unfair because in software most of the costs is labor, and once the first copy is made you can make and sell as many extra copies as you want. Physical manufacturing needs machine maintenance, and expensive materials in this case.
There is likely a lot of US tech in that chip. TSMC is just a fab, they don’t have a lot of their own technology, they buy thousands of pieces of tech from all over the world to make their chips. A lot of that comes from the US.
Yes, but it would be an even bigger blow to TSMC if all US companies would stop buying from them. I’m pretty sure nvidia, AMD and Apple make a very sizable part of their customer base.
Not really. China would just buy it all if given the chance and the US companies would be fucked, since TSMC is practically a monopoly within its field at the moment.
It’s not as easy, as TSMC needs ASML hardware, which wouldn’t sell it to TSMC anymore because they also want to sell to US companies.
I didn’t say it would be easy, but anything TSMC currently produces would likely find a new buyer even with no US customers, so in the short run the loser would not be TSMC. In the long run, it’s pointless to speculate, since US would probably try to level Taiwan down rather than let China have the semiconductor sector to itself… Let’s hope it doesn’t come to that, though.
Do you think China could soak enough capacity to get TSMC to turn away from all of its major customers? Isn’t most of their industrial design focused on consumer products with automaton, not high end chips? Are there many high end Chinese chip designs?
I’m sure TSMC would become untenable if either the US stopped buying or selling to them, though I tend to disagree and think that not licensing US tech would kill them faster. I’m pretty sure that much of that tech is not available from anywhere else and would just cause a full stop of their business, at least for some time. It’s easier to survive on lower revenue than it is on a fully shuttered assembly line.
Countries willing to pass on a US patent to China stop getting the chips (or, in this case, chip-making jobs, realistically, but that still hurts)
Also Taiwan doesn’t wanna help China and even if a US sanction was just an excuse to hurt China and get away with it they’d probably do it.
Edit: in this case, this chip is “foreign-produced items […] that are the direct product of U.S. technology or software”, according to the article. I feel it was implied but clarity is always good. US technology, used with permission in a Taiwanese good, and that permission could be retracted.
US law permits US control over any company in the world that uses US technology.
US legal mechanisms for internationally enforcing US law are not like domestic enforcement mechanisms. The scenarios that the pro-China folks here are talking about involve a (completely unrealistic) switch in Taiwanese allegiance, that would make US economic enforcement less relevant, and US military enforcement a serious international risk.
There are just a lot of tankies commenting, and you have to be able to interpret their logic.
The US claim on TSMC, are based on it using ASML (Dutch) equipment which has patent licenses from US. I was just answering the puzzling US colonial power roots. There may come a point of challenging the colonial patent power, while still attempting to pay for the patent, or China’s “delete America” program may get more allies or rebellion from the colonies.
China/BRICS is a much bigger market than US, and economics means figuring out a way to earn from all sides is motivated. US promises to isolate itself even more under Trump, and there is a limit to how much it will be respected.