TSMC Cuts Ties with Singapore’s PowerAIR Over Alleged Huawei AI Chip Supply
TSMC, the world’s leading semiconductor manufacturer, has severed ties with Singapore-based chip company PowerAIR following allegations that PowerAIR supplied chips to Huawei in violation of U.S. sanctions. According to a South China Morning Post report quoting three anonymous sources, a TSMC chip was discovered in Huawei's AI processor, triggering an investigation that culminated in the Taiwanese giant ceasing its business relationship with the Singaporean firm.
TSMC Increases Scrutiny Amid U.S. Sanctions on Huawei
The U.S. sanctions against Huawei, particularly under the Biden Administration, have intensified, limiting the Chinese tech giant's ability to acquire advanced chips manufactured using U.S. technology. These sanctions stem from national security concerns, particularly the fear that Huawei's technology could be used against American interests. Despite these measures, Huawei has allegedly found ways to acquire restricted chips, prompting TSMC to enhance its monitoring and enforcement efforts.
The recent discovery of TSMC chips in Huawei's Ascend 910B processor is not the first such incident. A Financial Times report in November revealed that these chips were manufactured before U.S. sanctions targeting them came into effect. However, the current situation indicates a more recent breach of compliance, leading to TSMC's decisive action against PowerAIR.
Huawei’s Persistent Efforts to Overcome Sanctions
Huawei has reportedly ramped up its strategies to navigate the semiconductor restrictions. These include leveraging China’s Semiconductor Manufacturing International Corporation (SMIC) for chip production, albeit with limitations due to SMIC’s own inability to acquire EUV lithography machines necessary for cutting-edge manufacturing.
Moreover, Huawei is allegedly targeting talent and technology from TSMC and Dutch firm ASML, the sole manufacturer of EUV machines. Reports claim Huawei has offered TSMC engineers triple salaries and other incentives to join its ranks. Similarly, suppliers in ASML’s ecosystem, such as lens manufacturer Zeiss, have faced Huawei's recruitment efforts.
Challenges for China's Semiconductor Sector
Huawei's reliance on SMIC presents additional hurdles. SMIC’s manufacturing capabilities are restricted to older technology nodes due to export controls, forcing the company to use costly and less efficient techniques like multi-patterning to produce chips comparable to those made with 7nm or lower processes. This places SMIC at a disadvantage, both in terms of cost and quality, compared to global leaders like TSMC.
What’s Next for TSMC and Huawei?
TSMC's move to cut ties with PowerAIR underscores its commitment to comply with U.S. regulations and protect its reputation. However, the ongoing cat-and-mouse game between Huawei and U.S.-allied semiconductor giants highlights the broader geopolitical tensions shaping the global tech industry.
What do you think about TSMC’s actions and Huawei’s strategies? Let us know in the comments!
