After the scandal with Huawei AI chips, TSMC began to slow down deliveries to other developers

The recent scandal with the investigation of TSMC and Huawei affected the interests of third companies, although the Chinese Sophgo at the end of last week stated that it was not connected with Huawei in any way. According to Nikkei, against the backdrop of these events, TSMC refused to supply chips to at least two developers whom it suspects of trying to violate US export sanctions in the interests of Huawei Technologies.

Image source: Bitmain

The companies mentioned anonymously ordered a large batch of 7nm chips from TSMC, and this was enough to suspect them of involvement in “smuggling” chips for Huawei’s needs. Along the way, the publication Block Tempo reports that these precedents are generally capable of having an adverse impact on the entire industry for the production of mining accelerators. It is generally accepted that the Chinese Sophgo, which lost access to TSMC services, was associated with the well-known developer of specialized mining solutions Bitmain.

Now, as reported, TSMC may limit the supply of chips for the needs of Bitmain itself or completely stop them. A recent already paid order from a Chinese developer was frozen by TSMC, and funds were seized on suspicion of violating US sanctions against Huawei. This may make it difficult for TSMC to supply key components for the Antminer L9 family of cryptocurrency mining accelerators, as the source notes. Even without this, the high demand for such products delayed the wait for deliveries for three months, and given the additional difficulties, the supply of the corresponding chips may even be in question. The specifics of the relationship between TSMC and Bitmain are such that the latter uses the services of a large number of intermediaries, and therefore their activities could come to the attention of regulators monitoring compliance with US sanctions restrictions.