Investing.com -- Taiwan Semiconductor Manufacturing (TSMC) could be facing a fine of $1 billion or more as a result of a U.S. export control investigation. The probe is centered around a chip produced by TSMC that was found within a Huawei AI processor, according to Reuters, citing two sources familiar with the matter.

The U.S. Department of Commerce has been examining TSMC’s work for China-based Sophgo, a design company. The chip made by TSMC for Sophgo was found to be identical to one inside Huawei’s high-end Ascend 910B artificial intelligence processor.

Huawei, a company at the heart of China’s AI chip aspirations, has been accused of sanctions violations and trade secret theft. It is currently on a U.S. trade list that limits its access to goods made with U.S. technology.

TSMC’s potential violation of export control regulations is under investigation. Companies found guilty of prohibited conduct could face fines up to twice the value of the involved transactions. At this point, it is unclear how and when the matter will be resolved.

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