“U.S. long-term sanctions on China’s semiconductor industry have proven porous,” said Arisa Liu, a research fellow and director at the Taiwan Economic Research Institute.

The discovery sparked efforts to find an explanation for what happened. TSMC halted a shipment to an unnamed customer after discovering that one of the chips supplied to the customer was found in a Huawei product, Reuters reported on Wednesday. The chipmaker also notified the US government and Taiwanese authorities about the incident, which was a possible violation of US export controls, according to Taiwanese official media.

In a previous statement, TSMC said that it had not supplied Huawei since September 2020. Huawei said it “has not produced any chips through TSMC following the implementation of the US Department of Commerce’s (foreign direct product rule) target changes.” Huawei in 2020”.

For now, there are more questions than answers. The duration, extent and scope of the suspected customer’s cooperation with TSMC are unknown. It is also unknown whether the customer has any relationship with Huawei or the Chinese telecom equipment manufacturer. It’s unclear whether the TSMC patterns found by TechInsights found their way into Huawei hardware via the same customer.

Whether Huawei has access to TSMC’s advanced foundry capacity, directly or through indirect proxies, is a sign that strict U.S. semiconductor restrictions targeting the Chinese national champion are in jeopardy, analysts say.

TechInsights’ finding went largely unreported in official Chinese media, but many social media accounts translated and quoted foreign media reports.