TSMC says it has alerted US of potential China AI chip curbs violation

(Reuters) -Taiwan Semiconductor Manufacturing Company (TSMC) said on Tuesday it has informed the United States of a potential attempt by Huawei to circumvent U.S. export controls prohibiting the chipmaker from producing AI chips for the Chinese company.

The U.S. government restricted the export of high-end AI chips to China two years ago, citing the need to limit the Chinese military's capabilities.

"We are not aware of TSMC being the subject of any investigation at this time," the company said in a statement, adding that it has not supplied to Huawei since mid-September 2020. TSMC's U.S.-listed shares were down 1.5%.

A crucial element of export controls is a rule prohibiting global chip manufacturers from utilizing U.S. technology or equipment to produce chips intended for Huawei or its products.

In recent years, the United States has escalated its use of export controls, aiming to thwart Chinese companies from obtaining, designing, or manufacturing advanced semiconductors.

Huawei, a primary target of these efforts, epitomizes the growing technology rivalry between Beijing and Washington.

TSMC informed the U.S. Commerce Department after a customer placed orders for a chip similar to Huawei's Ascend 910B, a processor designed for large language model training, a Financial Times report said earlier in the day, citing people familiar with the matter. The Commerce Department and Huawei did not immediately respond to Reuters requests for comments.

(Reporting by Karen Freifeld in New York and Akash Sriram in Bengaluru; Editing by Shinjini Ganguli)