On Thursday, February 27, Jeffrey Kessler, the nominee for director of the Bureau of Industry and Security (BIS) of the U.S. Department of Commerce, expressed concern over reports that Taiwan Semiconductor Manufacturing Company (TSMC) is producing hundreds of thousands of chips for Huawei.
The Bureau of Industry and Security is primarily responsible for handling issues related to national security and high technology, and is tasked with managing the Commerce Department’s export control list.
During his confirmation hearing before the Senate Banking Committee, Kessler was questioned about the issue of illegally shipping chips. “Ensuring that we have strong enforcement is crucial,” Kessler said. He pledged that if he leads the BIS, he will oversee the agency to “fully exercise its enforcement and punitive powers.”
Huawei has long been on the Commerce Department’s trade blacklist, prohibited from receiving U.S. goods and technology, as well as foreign-made goods involving U.S. technology. Companies like TSMC that manufacture chips using U.S. technology are also included in the ban.
In October 2024, the Canadian technology research company TechInsights disassembled Huawei’s 910B AI processor and found TSMC chips inside. The Huawei 910B is considered the most advanced AI accelerator mass-produced by a Chinese company.
On January 15 of this year, the Biden administration added more than 20 Chinese companies to the Entity List, including Sophgo, which was suspected of illegally using TSMC-manufactured chips in Huawei’s AI processors. Sophgo’s chips matched those found in Huawei’s 910B. At the end of last year, Sophgo was an affiliate of the Bitcoin mining equipment supplier Bitmain.
Currently, TSMC has halted shipments to Sophgo. Reuters reported that in November last year, the Commerce Department ordered TSMC to stop shipping certain chips to Chinese customers.
TSMC did not immediately respond to Reuters’ request for comment.