US investigates possible sanctions violations by TSMC, threatens Apple’s iPhone chip production – Taiwan Semiconductor (NYSE:TSM)

The US Department of Commerce has reportedly begun an investigation. Taiwan Semiconductor Manufacturing Co., Ltd. TSM It could potentially disrupt chip production Apple’s AAPL iPhone and Mac.

what happened: The US Department of Commerce is investigating whether TSMC violated sanctions by supplying the chips. Huawei Technologiesreported Apple Insider (via The Information).

The investigation began in early fall following allegations that TSMC may have been contracted by an intermediary company to manufacture smartphones and AI chips for Huawei.

Sanctions against Huawei in 2020 restricted the Chinese tech giant from obtaining parts from U.S. companies without approval from the Commerce Department.

It also banned the use of chips made with US-made equipment.

SEE ALSO: Trump campaign’s Snapchat absence could give Harris an edge among young voters

If found guilty, TSMC could face penalties including sanctions, which could directly impact chip production for customers including Apple, the report said.

Such penalties could cut off TSMC’s access to U.S. technology and equipment and disrupt production of new lines or maintenance of existing lines.

This could also limit Apple’s production of mobile chips, forcing the tech giant to find another chip partner.

Subscribe Benzinga Technology Trends Newsletter Get all the latest technology developments delivered to your inbox.

why is it important: Earlier this week, it was reported that TSMC may resist price hikes from equipment suppliers. ASML Holdingthis could lead to a price conflict between the two companies.

TSMC, based in Hsinchu, Taiwan, reported third-quarter sales of NT$759.69 billion ($23.5 billion), up 39% from a year ago and 12.8% from the previous quarter. In US dollar terms, sales increased 36% year over year and 12.9% sequentially.

The impact could be even greater, as TSMC’s Arizona facility, which secured a $6.6 billion grant through the Chips Act from the Commerce Department in April, could face a development halt.

It was previously reported that TSMC has started manufacturing A16 Apple’s Phoenix, Arizona, factory now manufactures chips for Apple, returning to using American-made chips for the first time in nearly a decade.

See more Consumer Tech coverage from Benzinga. follow this link.

Read next:

Disclaimer: This content is created in part using AI tools, and reviewed and published by Benzinga editors.

Photo credit: Shutterstock