Greetings,

TSMC is navigating significant challenges from both its largest customers and regulatory pressures. Our reporter Qianer Liu has been covering the chip giant's turbulent week in two crucial articles.

In Nvidia and TSMC's Lucrative AI Alliance Shows Signs of Stress, we dive into the tensions emerging between TSMC and Nvidia, one of its most valuable customers. Nvidia, whose success in AI chips has skyrocketed, is pushing back on TSMC's rising prices and delivery delays, raising concerns about the long-term stability of their partnership.

Meanwhile, in U.S. Probes TSMC's Dealings With Huawei, we reveal that the U.S. Commerce Department is investigating whether TSMC violated export rules by producing AI and smartphone chips for Chinese tech giant Huawei. The outcome of this probe could carry serious ramifications for TSMC, which relies heavily on U.S. technology for its chip production.

What these pieces caught my eye:

• TSMC under pressure from all sides TSMC is not only facing strained relations with Nvidia—its biggest AI customer—but also heightened scrutiny from the U.S. government. How the company navigates both challenges could reshape its role in the global chip supply chain.
• U.S.-China tech tensions As the U.S. cracks down on Huawei, TSMC's involvement in producing chips for the Chinese tech giant is under intense scrutiny. The investigation could have broader implications for global tech companies navigating U.S.-China tensions.
• The AI chip bottleneck: Nvidia's reliance on TSMC for its advanced AI chips highlights the critical bottleneck in the global semiconductor industry. If Nvidia and TSMC's relationship falters, it could have a ripple effect across the entire tech sector.

I recommend diving into both articles to get a deeper understanding of how TSMC's position in the AI and chipmaking world is evolving amid growing pressures.

Jessica Lessin
Founder & Editor-in-Chief

U.S. Probes TSMC's Dealings With Huawei

The U.S. Commerce Department is investigating whether Taiwan Semiconductor Manufacturing Co. has been making artificial intelligence or smartphone chips for Chinese tech giant Huawei Technologies in what would be a breach of U.S. export rules, said two people with direct knowledge of the matter.

Since 2020, the U.S. has banned Huawei from buying chips manufactured using American equipment, citing national security concerns. The U.S. restrictions also block Huawei from using U.S. technology to make its own chips without approval from the Commerce Department. In recent weeks the department has contacted TSMC to ask whether it was involved in making either smartphone chips or AI chips for Huawei, the people said.

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