Taiwan Semiconductor suspends supply to client after chip shows up in Huawei product – report

Taiwan Semiconductor Manufacturing (NYSE:TSM) has halted shipments to a customer after it found that one of its chips supplied to the client ended up in a product by Chinese company Huawei Technologies, Reuters reported, citing a Taiwanese official with knowledge of the matter.

TSM suspended shipments to the client about two weeks ago and started a detailed probe, the trade and economic official said, according to the report.

Taiwan Semi informed the U.S. and Taiwanese governments, the official noted and added that it was an “important warning event” within TSM, and can, at its earliest, be traced back to Oct. 11.

The name of the client was not disclosed.

Earlier this week, TSM said in an emailed statement to Seeking Alpha that it “proactively communicated with the US Commerce Department regarding the matter in the report.” The company had noted that it was not aware of TSM being the subject of any investigation at this time.

A spokesperson for the U.S. Department of Commerce said in a prior email to Seeking Alpha that the Bureau of Industry and Security was aware of reporting alleging potential violations of U.S. export controls, adding that it could not comment on whether any investigation is ongoing.

TSM had alerted U.S. officials after TechInsights took apart a Huawei product and found one of TSM’s chips, Reuters reported on Tuesday, which could be a potential violation of U.S. export rules targeted at China.