Report says TSMC could be fined $1 billion for violating the export control rules.

Key Takeaways

• Reuters reported that TSMC may face fines of $1 billion or higher to settle an investigation into a potential violation of U.S. Export Controls.
• The U.S. Department of Commerce is reportedly investigating TSMC's work for Chinese firm Sophgo, after a chip found in a Huawei AI processor matched chips TSMC shipped to Sophgo.
• Huawei is barred from receiving products made with U.S. technology, which TSMC's factories use, the report said.

Reuters reported that Taiwan Semiconductor Manufacturing Company could face fines of $1 billion or higher to settle an investigation regarding a possible violation by the U.S. Export Controls.

The U.S. Department of Commerce is reportedly investigating TSMC's work for Chinese firm Sophgo, after a chip found in a Huawei AI processor matched chips TSMC shipped to Sophgo. Huawei is barred from receiving products made with U.S. technology, which TSMC's factories use, the report said.

TSMC declined comment on the report and the Commerce Department didn’t immediately respond to a comment request. 

Reuters reported that TSMC had suspended shipments in October to Sophgo. Sophgo at the time denied any business relationships with Huawei.

Shares of TSMC fell about 4% during recent trading amid concerns over new tariffs. Since the beginning of the year, they’ve lost over a quarter of their original value.