Huawei's recent acquisition of hundreds of thousands of chips manufactured by Taiwan Semiconductor Manufacturing Company (TSMC) has triggered alarm bells within U.S. governmental circles, particularly in light of previous export restrictions. A notable mention of this concern comes from Jeffrey Kessler, President Donald Trump's nominee for the under secretary of commerce for industry and security. New reports indicate that these chips potentially violate existing trade regulations that prohibit the shipment of advanced semiconductors to Huawei, raising critical questions about the enforcement of U.S. export laws.
During his nomination hearing, Kessler emphasized the urgency of addressing illegal chip shipments, stating, "This is obviously a huge concern. It's critical to ensure that we have strong enforcement." Should he gain approval for his role, Kessler intends to leverage the full enforcement capabilities of the Commerce Department's Bureau of Industry and Security (BIS) to mitigate these risks.
While the U.S. currently leads in AI chip design, the gap with China may be narrowing. The technological race intensified as both nations vie for dominance in AI, especially given its military applications, necessitating the use of high-performance silicon components.
TechInsights, a Canadian tech research firm, previously discovered a TSMC chip in Huawei's Ascend 910B AI accelerator, a critical component for enhancing AI functionalities like machine learning. This accelerator is touted as the most state-of-the-art AI chip mass-produced by a Chinese company, fabricated by China's leading foundry, SMIC, using its advanced 7nm N+1 production technology.
"AI accelerators, like the one that these chips fueled, are at the forefront of our technology race with the CCP, and I fear the damage done here will have significant consequences for our national security," warned John Moolenaar, chair of the House Committee on the Chinese Communist Party.
After the discovery of the TSMC chip inside the Ascend 910B last October, Moolenaar criticized the situation as a "catastrophic failure of export control policy." Following the incident, the U.S. Commerce Department mandated that TSMC cease shipments to Chinese companies. Reports suggest that Sophgo, another Chinese chip designer, had also placed substantial orders with TSMC, exacerbating concerns over compliance to export regulations.
TSMC, claiming to be a law-abiding entity, has publicly stated that it has not shipped chips to Huawei since 2020, potentially omitting the qualifier "directly." Historically, however, Huawei was TSMC's second-largest client, trailing only Apple in orders. Furthermore, Huawei asserts that their Ascend 910B outperforms NVIDIA's A100 AI GPU by up to 20% in training applications.
