The Information reported that the US Department of Commerce has contacted TSMC in recent weeks to inquire about manufacturing for Huawei.

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The US is investigating TSMC for its ties to Huawei. Photo: Bloomberg

In an emailed statement, the world's largest chip foundry asserted that it is a “law-abiding company” and has processes in place to ensure compliance.

“If there is any reason to believe there is a potential issue, we will take action to ensure compliance, including conducting an investigation and proactively communicating with relevant parties such as customers and regulators,” TSMC said.

Huawei was blacklisted by the US in 2020 over national security concerns, barring it from buying chips made with US equipment.

The US also banned Huawei from producing its own chips using US technology without a license from the Department of Commerce.

Chinese tech giants also cannot buy US chip manufacturing equipment.

Until now, Huawei has insisted that all of its advanced chips are manufactured by SMIC – China's largest foundry.

The company's new smartphone chip, due to be launched in 2023, is seen as a major breakthrough for the mainland semiconductor industry.

Over the past two years, the US has introduced a series of sanctions to prevent Chinese companies from accessing advanced chips and AI technology.

Companies like Nvidia – makers of cutting-edge AI chips – cannot sell to China.

TSMC is the world's largest contract chipmaker and plays a key role in the chip supply chain. It is a major supplier of advanced chips used in AI and smartphones.

(According to Investing)