The US Commerce Department is investigating whether TSMC manufactured artificial intelligence or smartphone chips for Huawei, a company that has been on the US trade restriction list since 2019.

It appears that TSMC flagged an incident involving Huawei’s Ascend 910B chip—an AI processor capable of handling large language models with a performance level comparable to Nvidia’s A100 graphics card, which can achieve speeds of up to 9.7 teraflops when processing 64-bit floating-point numbers.

The Financial Times noted that TSMC had received an order for a processor resembling the Ascend 910B and duly alerted US authorities.

According to a source quoted by the paper, there is "no suggestion of malicious" intent on TSMC's part regarding regulatory compliance. However, a separate source indicated that while the US Commerce Department’s investigation may be "related" to TSMC, the Taiwanese company is unlikely to be at the centre of the probe.

The chipmaker’s disclosure to the Commerce Department reportedly followed an analysis by TechInsights, a Canadian market research firm, which examined an Ascend 910B chip and discovered TSMC technology embedded in it.

TSMC issued a statement reiterating its commitment to adhering to legal frameworks:

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

Meanwhile, The Wall Street Journal had earlier reported that Huawei was preparing to release a successor to the Ascend 910B, which would rival Nvidia's H100 graphics card. The H100, launched in 2022, is approximately three times faster than the A100, which the Ascend 910B is designed to match.

According to sources, Huawei's new AI chip is expected to be unveiled this month, with orders for 70,000 units valued at around $2 billion already placed.