Huawei procures hundreds of thousands of chips from TSMC, raising concerns over Trump nominee.

Many readers of PhoneArena are likely familiar with the changes made to U.S. export laws in 2020. These changes prevent chip manufacturers that use American technology from selling advanced chips to Huawei, a major Chinese tech company. Recently, it was reported that Huawei acquired hundreds of thousands of chips from TSMC, a well-known chip maker. This news raised concerns, especially for Jeffrey Kessler, who has been nominated by former President Donald Trump to become the under secretary of commerce for industry and security in the Commerce Department.

During his nomination hearing, Kessler was questioned about these shipments of chips during a session with the Senate Banking Committee. He acknowledged that this situation raises significant concerns and emphasized the importance of strict enforcement of the existing export rules. If confirmed in his role, Kessler plans to oversee the Bureau of Industry and Security (BIS) within the Commerce Department, advocating for the full use of enforcement powers available to them.

While the United States leads the world in designing artificial intelligence (AI) chips, it is uncertain how close China is to matching this expertise. AI technology is a critical area of competition in the tech world, especially considering its potential applications in military operations. Both the U.S. and China are deeply invested in developing powerful AI systems, which require advanced silicon components.

Last year, a Canadian research company called TechInsights examined a chip named the Huawei Ascend 910B, which is specifically designed to enhance AI tasks such as machine learning. Traditional CPUs are not suitable for these types of operations, which is why the Ascend 910B is seen as a significant advancement in AI chip technology, being mass-produced by a Chinese firm. This chip was manufactured by China’s largest foundry, SMIC, known for its advanced 7nm N+1 node technology.

John Moolenaar, the chair of the House Committee focused on the Chinese Communist Party (CCP), expressed serious concerns over this issue. He referred to the TSMC chips found in Huawei’s AI equipment as a “catastrophic failure of export control policy,” indicating that such violations could pose grave risks to national security.

When TechInsights discovered the TSMC chip within the Ascend 910B, it violated U.S. export regulations. Investigations revealed that the chip matched one produced by TSMC for another Chinese company called Sophgo. In response, the U.S. Commerce Department instructed TSMC to cease shipments of chips to Chinese companies. Sophgo had reportedly placed orders for hundreds of thousands of chips from TSMC.

This week, TSMC, the world’s largest chip foundry, stated that it follows the law, claiming it has not sent chips to Huawei since 2020. However, some have speculated that the company might have been indirectly involved. Once upon a time, Huawei was TSMC’s second-largest customer, right after Apple.

Having assessed the performance of the Ascend 910B, Huawei claims that its AI accelerator can outperform NVIDIA’s A100 AI GPU by up to 20% when it comes to training efficiency. This highlights the competitive landscape of AI technology, revealing both the advancements and challenges faced in maintaining export controls in the tech industry.