Taiwan Semiconductor Manufacturing Company TSM has reportedly informed the U.S. about a chip in a Huawei Technologies Co. product, following reports by a tech research firm.
What Happened: TSMC notified the U.S. Commerce Department after TechInsights discovered one of its chips in a Huawei product, a source familiar with the matter told Reuters.
The product in question was Huawei’s Ascend 910B, which is considered the most advanced AI chip from a Chinese company.
The TSMC product in question is part of a multi-chip system, according to the report. The company was alerted about the chip by TechInsights before the research firm published its findings. This prompted TSMC to notify the U.S. Commerce Department a few weeks ago.
TSMC stated on Monday that it had reached out to the Commerce Department proactively. The company also confirmed that it had not supplied chips to Huawei since mid-September 2020. Huawei, on the other hand, stated that it has not procured any chips from TSMC after the U.S. rules were implemented in 2020.
"TSMC is a law-abiding company and we are committed to complying with all applicable rules and regulations, including applicable export controls," a company spokesperson said in a statement on Wednesday, according to CNBC.
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Why It Matters: TSMC’s disclosure comes amid a surge in demand for AI chips, particularly from companies like Nvidia Corp., which has seen its shares soar to new heights. The U.S. Commerce Department is already investigating TSMC for potential violations of export controls, which could disrupt chip production for Apple Inc. AAPL.
Despite these challenges, TSMC’s strong performance in the third quarter and its ongoing technological advancements, such as the 3nm chip, have led to bullish forecasts from analysts.
Industry experts, including Gene Munster, predict a bull market driven by AI, despite short-term fluctuations, indicating that the demand for advanced chips is likely to continue.
TSMC did not immediately respond to Benzinga’s request for comment.
Price Action: TSMC closed at $198.48 on Tuesday, down 1.72% for the day. In pre-market trading, the stock further declined by 0.76%. Year to date, the stock has surged 95.49%, according to data from Benzinga Pro.
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This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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