Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest contract chipmaker, has severed its relationship with PowerAIR, a Singapore-based chip company, after an internal review raised concerns over a potential violation of U.S. export controls, sources familiar with the matter revealed.

The review was triggered by the discovery of a TSMC-manufactured chip in an artificial intelligence (AI) processor produced by Huawei Technologies. According to the sources, PowerAIR is the second company to be implicated in the case involving the Chinese tech giant. Last year, TSMC also suspended shipments to the mainland China-based chip designer Sophgo after a TSMC chip ordered by the company was found to match one used in Huawei's Ascend 910B multi-chip system.

The move follows ongoing scrutiny of companies with potential links to Huawei, which has been under a sweeping U.S. ban since 2020, effectively cutting off its access to global semiconductor foundries. TSMC has maintained that it has not supplied chips to Huawei since the ban was implemented, and Huawei has similarly denied any chip production through TSMC during that period.

PowerAIR, a relatively low-profile company founded in September 2023, is registered as an engineering design and consulting firm based in Singapore’s central business district. According to corporate records, it has been flagged for possible links to a restricted Chinese entity, raising suspicions that it could be acting as a "front" company for the banned Chinese firm.

Further reports indicate that TSMC has been increasing its scrutiny of other Chinese AI chip design startups, including Enflame Technologies, MetaX, and Iluvatar Corex, as part of its broader efforts to ensure compliance with U.S. export regulations.

This latest move underscores the ongoing impact of U.S. export controls on the global semiconductor supply chain and highlights the heightened caution exercised by leading chipmakers like TSMC in navigating the complex geopolitical landscape.