Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest chip maker, could be required to pay a hefty fine exceeding $1 billion following an investigation into potential violations of U.S. export regulations.

TSMC, renowned for its cutting-edge semiconductor production, reportedly faces scrutiny from the U.S. Department of Commerce due to its alleged involvement in providing chips that ended up in products made by Chinese tech giant Huawei. According to Reuters, the fine stems from an investigation into whether TSMC unknowingly violated export control laws related to sales made to intermediaries connected to Huawei.

The root of the issue lies in a TSMC chip found in Huawei’s Ascend 910B AI processor. This discovery led to further investigations, revealing that the intermediary company Sophgo had been facilitating transactions between TSMC and Huawei. Despite the situation, TSMC insists that it has not provided chips to Huawei since 2020, sparking uncertainty about whether any violations were intentional.

The U.S. has stringent export control laws that prohibit American-made technology from being sold to certain entities, including Huawei, which has been blacklisted for national security concerns. This includes machinery used to manufacture semiconductors, with several of TSMC’s machines being sourced from U.S. companies. The U.S. government’s probe into the matter raises questions about TSMC’s adherence to these regulations, even if the violations were unintentional.

A potential $1 billion fine would be based on export control laws, which allow penalties of up to twice the value of transactions that violate the rules. If confirmed, the fine could pose a significant challenge to TSMC, though it is not likely to threaten the company’s overall stability.

As of now, TSMC has yet to receive an official charging letter, which would allow the company time to respond to the allegations. Despite this, the ongoing investigation and the potential penalty have raised concerns in the tech and financial sectors alike.

For more details, visit the full article on PC Gamer.