TSMC faces trouble: It’s making AI chips for Huawei despite sanctions, US says

Recovering TSMC is crucial for Huawei because it is the only way to immediately access cutting-edge lithography.
CSIS maintains that its accusations are based on information provided by the US government.

Either way, it makes perfect sense for Huawei to try to get TSMC to manufacture some of the integrated circuits it designs. The Chinese company is backed in this area by SMIC, China’s leading semiconductor producer, but its most advanced integration technologies are no match for TSMC’s cutting-edge lithography. And not having access to the most advanced lithographic nodes undermines Huawei’s competitiveness.

At the end of October 2024, the US Department of Commerce decided to investigate TSMC due to suspicions that the giant Taiwanese company may have secretly entered into agreements with Huawei to manufacture its semiconductors for smartphones and artificial intelligence (AI) applications. In the current climate of tension between the US and China, this accusation is very serious. Fortunately for TSMC, everything became clear a few months later.