US probe into TSMC could jeopardize Apple's iPhone chip production

A US Commerce Department investigation into a possible sanctions breach by TSMC could affect Apple's chip supply. The probe follows the US placing sanctions against Huawei in 2020, which blocked the company from accessing components from US companies without approval. This includes TSMC, a partner of Apple.

The Information reported that the Commerce Department contacted TSMC earlier this fall to enquire whether it was making smartphone or AI chips for Huawei. It is believed an intermediary firm may have masked Huawei as its client and if found guilty, TSMC could face penalties including possible sanctions which would impact production capabilities.

If TSMC finds itself blocked from accessing US technology and equipment even temporarily, this could disrupt the production of new product lines or maintaining existing capacity on Apple's A-series and M-series chips. Apple may be forced to seek another chip partner in the interim which due to their sizeable manufacturing operation would prove costly.

The outcome of the investigation also has wider implications for a TSMC facility being built in Arizona, where a sanction could halt its progress immediately.