Editor’s note: This story has been updated to add a statement from Bitmain and to make clearer the attribution of media reports about Taiwan Semiconductor.
Taiwan Semiconductor Manufacturing Company (NYSE:TSM) has halted chip shipments to two developers over potential links to Chinese smartphone giant Huawei Technologies Co.
The two firms had ordered chips built on Taiwan Semiconductor’s 7nm process, raising suspicions as order volumes grew, Taiwan News reported Wednesday, citing Nikkei Asia.
The Taiwanese contract chipmaker emphasized its strict compliance protocols, stating it actively investigates and communicates with partners if regulatory concerns arise.
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Bitmain Denies Involvement With Supply Chain Issues: a major bitcoin mining hardware manufacturer, faces possible disruptions in its chip supply from Taiwan Semiconductor over suspicions of breaching U.S. chip export sanctions, Block Tempo reported Tuesday.
Block Tempo’s sources suggest Bitmain may have acquired Taiwan Semiconductor’s 7nm chips and transferred them to Huawei, which has been under a U.S. export ban since 2019, the report said.
As a result, Taiwan Semiconductor halted shipments to Bitmain’s subsidiary Sophgo after Huawei’s AI chip Ascend 910B, allegedly containing Taiwan Semiconductor-made components, surfaced, the report said, adding that Bitmain now faces a critical supply chain challenge that could impact the mining industry.
In a Monday statement, Bitmain said it specializes in designing cryptocurrency mining rigs.
“Bitmain is not involved in or otherwise related to the supply chain investigation as reported by the media recently,” the company said. “Any news alleging that Bitmain is involved in the aforementioned event is false and baseless.”
If Bitmain’s supply of high-demand mining chips is restricted, ASIC chip shipments and inventory might decline, potentially slowing Bitcoin’s computational power growth.
Insiders in Taiwan’s semiconductor industry suspect intermediaries have purchased Taiwan Semiconductor chips through various channels, potentially redirecting them to Huawei, according to the Block Tempo report.
Taiwan Semiconductor Critiqued By Trump: China remains a significant market for Taiwan Semiconductor, accounting for over 10% of its revenue, according to Bloomberg. Before 2020, when Huawei was an important client, China contributed nearly 20% of Taiwan Semiconductor’s sales.
Morris Chang, Taiwan Semiconductor’s co-founder, told Bloomberg that increasing geopolitical tensions challenged Taiwan Semiconductor’s place in the global supply chain.
Republican presidential candidate Donald Trump‘s recent rant against Taiwan for the second time made things worse for the Taiwanese contract chipmaker.
Trump criticized Taiwan Semiconductor again, this time on Joe Rogan‘s podcast, accusing Taiwan of weakening the U.S. chip industry. He also attacked the U.S. CHIPS Act, pledging to impose tariffs on Taiwanese chips if he returned to the presidency.
Following Trump’s statements, Taiwan Semi stock fell 4.3% on Monday. Previously, Trump had questioned the U.S. defense commitment to Taiwan, noting the lack of a formal defense treaty like those with South Korea and Japan.
Taiwan Semiconductor stock has gained 94% year-to-date.
Price Action: TSM stock traded lower by 1.12% at $194.74 at the last check on Wednesday.
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