Taiwan Semiconductor Manufacturing Co. has notified U.S. officials about a potential attempt by a customer to circumvent export controls on chip technology.

Reuters and the Financial Times reported the development today. Earlier, sources told The Information that the U.S. Commerce Department is investigating whether TSMC has made artificial intelligence or smartphone chips for Shenzen-based Huawei Technologies Co. Huawei was placed on a U.S. trade restriction list in 2019. 

According to today’s reports, TSMC alerted the Commerce Department about an incident involving a Huawei chip known as the Ascend 910B. It’s an artificial intelligence processor capable of running large language models. The Ascend 910B reportedly has similar performance as Nvidia Corp.’s A100 graphics card, which can reach a top speed of 9.7 teraflops when processing 64-bit floating point numbers.

According to the Financial Times, TSMC alerted U.S. officials that it had received an order to make a processor resembling the Ascend 910B. The paper cited a source as saying that there is “no suggestion of malicious” regulatory compliance violations on the chipmaker’s behalf. Another person familiar with the matter stated that a Commerce Department investigation into the matter will be “related” to TSMC, but the company is not expected to become a core focus of the probe.

Sources told Reuters that the chipmaker’s regulatory disclosure to the Commerce Department followed a discovery by TechInsights Inc., a Canadian market research firm. The firm reportedly analyzed an Ascend 910B and found technology from TSMC. 

“TSMC is a law-abiding company and we are committed to complying with all applicable rules and regulations, including applicable export controls,” the chipmaker said a statement. “In compliance with the regulatory requirements, TSMC has not supplied to Huawei since mid-September 2020.”

In August, the Wall Street Journal reported that Huawei was gearing up to launch a successor to the Ascend 910B. The upcoming chip will reportedly offer comparable speeds to the H100, a graphics card that Nvidia launched in 2022. The H100 is about three times faster than the A100, the Nvidia chip that the current-generation Ascend 910B is reportedly designed to match in performance. 

The Journal’s sources said that Huawei was planning to launch the new AI chip this month. It’s believed the electronics maker has so far received orders for 70,000 units worth about $2 billion.

In recent years, the U.S. has rolled out a series of export restrictions designed to limit the sale of advanced chips and chipmaking equipment to China. Those rules apply to, among other products, Nvidia’s most capable data center graphics cards. In June, Bloomberg reported that the export restrictions could be extended to gate-all-around transistor technologies.

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