What’s happening with Taiwanese semiconductor stocks on Monday? – Taiwan Semiconductor (NYSE:TSM)

Taiwan Semiconductor Manufacturing Co., Ltd. TSM has suspended shipments to China-based chip designer Sofgo after it was discovered that Huawei’s Ascend 910B AI processor contained its own chips.

Sofgo, which has ties to cryptocurrency mining company Bitmain, reportedly ordered chips identical to those found in Huawei’s processors, according to Reuters.

The exact route by which the chip ended up in Huawei products remains unclear, but Taiwan Semiconductor alerted U.S. and Taiwanese authorities about two weeks ago and began a thorough investigation.

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Previous reports indicated that Chinese companies used a variety of techniques to circumvent the U.S. semiconductor embargo and obtain advanced AI chips.

According to Reuters, Taiwan Semiconductor, Sofgo and Huawei denied knowing about the violations and acknowledged they had complied with the semiconductor embargo since it began.

Sofgo insisted it complied with all legal requirements and denied any business relationship with Huawei. Provided Taiwan Semiconductor with a detailed report confirming that it had no involvement with Huawei.

TechInsights discovered chips made by Taiwan Semiconductor when disassembling Huawei’s multi-chip processor.

Taiwan Semiconductor, which has not directly supplied chips to Huawei since mid-September 2020, has notified the U.S. Department of Commerce of the findings of its investigation, but said it is not currently investigating.

Huawei also said it has not manufactured Taiwanese semiconductors and chips since the United States tightened export controls in 2020.

Taiwan Semiconductor is a major supplier to Apple Inc. AAPL and Nvidia Inc. NVDAwhich produces 99% of the world’s AI accelerators, Bloomberg reports. The Taiwanese contract chipmaker is up more than 136% in the past 12 months.

Despite these achievements, Taiwan Semiconductor continues to improve in manufacturing advanced AI semiconductors for China as the US works with allies such as Japan and the Netherlands to restrict access to China’s cutting-edge chips. There is a need for

However, China still accounts for more than 10% of Taiwan Semiconductor’s revenue, according to Bloomberg. Before 2020, when Huawei was a major customer, Taiwan Semiconductor was dependent on China for about 20% of its sales.

Taiwan Semiconductor Co. co-founder Morris Chan expressed confidence on Sunday that the contract semiconductor maker will continue to achieve remarkable success in the semiconductor industry under its current leadership, the Taipei Times reported. .

Speaking at Taiwan Semiconductor’s annual sports festival event, Zhang said globalization of trade is “dead” due to rising geopolitical tensions, and believes this is a challenge to the company’s role in global supply chains. There is.

Price Action: TSM stock was down 2.01% at a pre-market price of $199.35 at last check on Monday.

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