By By Karen Freifeld
(Reuters) -Taiwan Semiconductor Manufacturing Company notified the U.S. that one of its chips had been found in a Huawei product after tech research firm TechInsights took apart the product, a person familiar with the matter said, revealing a possible violation of export restrictions on the Chinese company.
The teardown was of Huawei’s Ascend 910B, another source said. The 910B is viewed as the most advanced AI chip available from a Chinese company. The first source would not identify the item, but said the TSMC chip was one within a multi-chip system.
TechInsights informed TSMC of the chip before publishing its findings in a report, the person said, prompting the Taiwanese firm to notify the U.S. Commerce Department a couple of weeks ago.
The revelation could show how difficult enforcing export controls can be for both companies making highly desired products and regulators. At the same time, it also shows Huawei’s sustained need for the most sophisticated chips.
TSMC said in a statement on Monday that it had proactively reached out to the Commerce Department regarding the matter. It said it had not supplied chips to Huawei since mid-September 2020.
“We are not aware of TSMC being the subject of any investigation at this time,” the company said.
Huawei was placed on a U.S. trade-restriction list in 2019 for national security purposes.
TechInsights, whose report has yet to be published, declined to comment.
Shenzhen-based Huawei said in a statement it has not produced any chips via TSMC after the implementation of the U.S. rules in 2020.
It is unclear how the chip made its way to Huawei. In 2019, the company released its Ascend 910 chip series. At the time, prior to export controls, the chips were produced by TSMC, two sources told Reuters earlier this year.
The Information and the Financial Times have reported that the U.S. is looking into TSMC and Huawei.
The Commerce Department said in a statement it is “aware of reporting alleging potential violations of U.S. export controls,” but cannot comment on whether any investigation is ongoing.
A third source confirmed TechInsights did a teardown of a Huawei product and found what looks like a chip manufactured by TSMC.
“We maintain a robust and comprehensive export system for monitoring and ensuring compliance,” TSMC said in its statement.
Taiwan’s government, which has its own tough rules in place to stop advanced chips being produced in China, has repeatedly said it will ensure Taiwanese tech companies follow U.S. rules.
“We will have full communication with the company,” Taiwan Economy Minister Kuo Jyh-huei told reporters in Taipei on Wednesday, without elaborating.