TSMC risks potentially substantial fines if the probe confirms that the company helped Huawei access US-made chips. Last year, Seagate was fined $300 million for shipping 7 million disc drives to Huawei. The chipmaker could also face "more severe penalties," The Information reported, such as restrictions blocking TSMC from accessing US tech.

The U.S. is reportedly probing whether TSMC is making AI or smartphone chips with Huawei, currently barred from accessing chips made with U.S. technology.

TSMC is the latest US target over dealings with Huawei. According to The Information, the US Commerce Department has decided to investigate Taiwan Semiconductor Manufacturing Co. (TSMC).

The US is investigating whether Huawei accessed advanced American chip technology via TSMC, despite a ban on such sales.

TSMC is a law-abiding company and we are committed to complying with all applicable rules and regulations," the company said.

Taiwan Semiconductor Manufacturing Company (TSMC) has vowed to take prompt action if found violating U.S. sanctions on Huawei, as the Commerce Department investigates alleged chip sales to the Chinese tech giant.

The U.S. Department of Commerce is reportedly investigating whether Taiwan's chipmaking giant TSMC produced AI or smartphone chips for China's Huawei.