Huawei outwitted TSMC and bypassed sanctions

The Taiwanese company TSMC some time ago informed the American authorities about a possible attempt by Huawei to circumvent sanctions and produce chips for AI accelerators at the facilities of the Taiwanese company. According to the Financial Times, TSMC raised the alarm after a customer placed an order for chips that looked suspiciously like the Huawei Ascend 910B, designed to train large language models.

Image source: Huawei

It is reported that some time ago, a third-party company ordered from TSMC the production of chips suspiciously similar to Huawei solutions, which the company notified US authorities about. There were no formal reasons for the refusal, and the chips were probably manufactured. As a result, the Taiwanese manufacturer came under investigation by the US Department of Commerce for possible supplies of artificial intelligence processors or smartphones to Huawei in violation of US export restrictions. In response, TSMC said: “We are liaising with the US Department of Commerce regarding the matter mentioned in the publication, but we are not aware of any investigations into TSMC at this time.”

Let us recall that since 2020, the United States has strengthened control over the export of advanced chips for Chinese companies, citing risks to national security. In particular, American authorities fear that the technology could be used for China’s military needs. Since May of the same year, TSMC, in accordance with regulatory requirements, stopped producing chips for AI accelerators and smartphones from Huawei Technologies. Interestingly, Huawei has long been under US scrutiny, as Washington suspects the company of potential espionage activities through its telecommunications equipment. China has repeatedly accused the United States of similar actions.

Severe sanctions against Huawei significantly impacted the tech giant’s financial performance, forcing telecom providers in the US, and then the UK and the European Union, to replace the company’s equipment. The US has also cut off Huawei’s access to chips made using American technology, effectively preventing Huawei from ordering chips from TSMC that it needs to make smartphones, as well as communications infrastructure and autonomous driving systems.

All these restrictions have pushed China to accelerate its own technological independence. The number of artificial intelligence patents has increased by 42% in 2023-2024, and Chinese chip designers such as Loongson have announced progress in creating processors that could catch up with Western counterparts in performance within a few years. In particular, the latest Loongson 3B6600 processor, based on the LoongArch architecture, is comparable to 7nm products from Intel and AMD, which were introduced about three to five years ago.