Taiwan Semi Faces Geopolitical Strain Due To US Scrutiny On Huawei's Chip Access

The U.S. administration again expressed concerns over Huawei Technologies’ access to Taiwan Semiconductor Manufacturing Co TSM chips, signifying continued geopolitical tensions over possessing artificial intelligence semiconductor technology.

Recently, U.S. President Donald Trump’s export policy leader nominee, Jeffrey Kessler, highlighted concerns to Reuters over reports citing Taiwan Semiconductor-produced chips that went to China’s Huawei.

Kessler emphasized the Commerce Department’s Bureau of Industry and Security’s use of stricter penalties in cases of regulatory violations.

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Taiwan Semiconductor client Nvidia Corp NVDA dominates the AI chip market as Huawei struggles to match CUDA’s efficiency.

Washington restricted erstwhile smartphone giant Huawei’s exposure to advanced semiconductor technology in 2019, citing national security threats.

In October, a Canadian tech research firm, TechInsights, reportedly found a banned Taiwan Semiconductor chip in Huawei’s 910B AI processor.

Taiwan Semiconductor and Huawei professed their compliance with regulatory policies. Additionally, Taiwan Semiconductor suspended shipments to China-based chip designer Sophgo; shortly after, the U.S. imposed sanctions on Taiwan Semiconductor chip shipments to Chinese customers.

China verbally attacked Taiwan for surrendering its semiconductor industry to the U.S. for political support against China as Taiwan’s government relies on U.S. military support despite any defense treaty.

Since his presidential campaign, U.S. President Donald Trump has criticized Taiwan for allegedly stealing American semiconductor business and promised action against the country. Trump has also threatened retaliatory tariffs because of Taiwan’s trade surplus with the US.

Taiwan reportedly promised to boost U.S. trade and defense ties, addressing Trump’s chip concerns. Taiwan Semiconductor remains committed to its $65 billion investment in Arizona fabs.

Taiwan Semiconductor spent over $17 billion on advanced chips and packaging as it pushes for a global AI chip alliance. Taiwan also maintained that although it says Taiwan Semiconductor needs government approval for overseas joint ventures, the country allows advanced chip production outside China.

Price Action: TSM stock is down 1.05% at $179.18 at the last check Friday.

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