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TSMC May Face $1bn Fine; 100% Tax On Non-Investment in US
April 9, 2025
Taiwan Semiconductor Manufacturing Company (TSMC) may face a $1bn or more penalty as part of a US export control investigation into a chip it produced that allegedly ended up in Huawei’s AI processor, despite US restrictions. The investigation focuses on TSMC’s work for China-based Sophgo, whose chip design reportedly matched the one in Huawei’s high-end Ascend 910B AI processor. Huawei is on a US trade blacklist, and US export control laws prohibit TSMC from supplying such companies without a license. TSMC denies supplying Huawei since September 2020 and says it is cooperating fully with the US Department of Commerce. As of now, no formal charges or penalties have been issued, but a proposed charging letter, which outlines allegations and potential penalties, could be the next step.
Additionally, US President Trump warned TSMC that it would face up to a 100% tax if it didn’t build its factories in the United States. Speaking at a Republican event, Trump criticized the Biden administration for giving a $6.6bn grant to TSMC’s US operations, arguing that chipmakers don’t need such financial support. In March, TSMC announced plans for a $100bn investment in the US, including the construction of five new chip facilities.
TSMC’s bonds were stable with its 4.375% 2027s at 99.97, yielding 4.39%.
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