By Karen Freifeld
(Reuters) – U.S. President Donald Trump’s nominee to a post overseeing export policy on Thursday called reports about Taiwan Semiconductor Manufacturing Co producing hundreds of thousands of chips that went to China’s Huawei, a “huge concern.”
Jeffrey Kessler, Trump’s pick for under secretary of commerce for industry and security, was asked at his nomination hearing before the Senate Banking Committee about the reported illegal shipments of chips and his approach to export control policy and improved enforcement.
“This is obviously a huge concern,” Kessler said. “It’s critical to ensure that we have strong enforcement.”
The Commerce Department’s Bureau of Industry and Security, which he would oversee, should use “the full scope of enforcement and penalty authorities that it has,” he said.
The U.S. and China are locked in a technology war, with AI capabilities now at the center of the battle for dominance and military capabilities. The United States leads in both AI development and chip design, but it is unclear whether China is months or years behind.
Huawei, which is at the center of China’s AI ambitions, is on a Commerce Department trade list that essentially bars it from receiving U.S. goods and technology, as well as foreign-made goods such as chips from companies like TSMC made with U.S. technology.
In October, TechInsights, a Canadian tech research firm, took apart Huawei’s 910B AI processor and found a TSMC chip in it. The multi-chip 910B is viewed as the most advanced AI accelerator mass-produced by a Chinese company.
TSMC suspended shipments to China-based chip designer Sophgo, whose chip matched the one in the Huawei 910B and, in November, as Reuters reported, the Commerce Department ordered TSMC to halt shipments of more chips to Chinese customers.
About the same time, there were media reports about Sophgo ordering hundreds of thousands of chips.
TSMC did not immediately respond to a request for comment on the hearing. In a statement on Wednesday, a spokesperson said it was “a law-abiding company” and has not supplied Huawei since mid-September 2020.
(Reporting by Karen Freifeld; Editing by Rod Nickel)
