By Jeffrey A. Newman Esq.
Taiwan Semiconductor Manufacturing Company may face a fine of up to $1 billion or more for violating U.S. export control laws against Huawei. The Bureau of Industry and Security has reportedly been investigating the chip company after one of its chips was found in a Huawei product and Reuters said Commerce could reach a $1 billion penalty because export control regulations allow the agency to issue a fine of up to twice the value of transactions that violate the rules.
The probe centers on chips produced by TSMC for Sophgo, a Chinese design firm, which were discovered inside Huawei’s Ascend 910B AI processor.Since Huawei is on the U.S. Entity List, export controls prohibit supplying products to Huawei that were made using U.S. technology, including chipmaking equipment frequently used by TSMC.Nearly three million chips matching Sophgo’s designs were manufactured by TSMC, and these were ultimately found powering Huawei processors, triggering the U.S. investigation. Reportedly, TSMC suspended shipments to Sophgo and halted advanced chip exports to China as soon as violations were suspected. TSMC’s chipmaking equipment includes US technology, making its Taiwan factories subject to US export controls. These controls prevent the company from making chips for Huawei or producing certain advanced chips for any Chinese customer without a US license.
Revocation of Export Privileges: As of September 2025, the U.S. revoked TSMC’s fast-track export privileges (validated end user status), meaning all U.S. equipment exports to TSMC’s Nanjing facility in China now require individual licenses.
The investigation of TSMC’s violations of U.S. export controls has specifically named Huawei Technologies and Sophgo as primary Chinese companies involved. Additionally, recent enforcement actions and export restriction lists have included Zhipu AI and Semiconductor Manufacturing International Corporation (SMIC) as entities linked to the diversion of restricted chips produced by TSMC.
Jeffrey Newman Law is a whistleblower law firm representing whistleblowers reporting violations of export controls, tariff evasion and other kinds of WB cases. The firm website is www.JeffNewmanLaw.com . Attorney Newman can be reached at Jeff@Jeffnewmanlaw.com or at 978-880-4758
