Taiwanese chipmaking giant TSMC halted shipments to a customer this month after its semiconductors were sent to China’s Huawei, a Taipei government official told AFP, potentially breaching US sanctions.Taiwan Semiconductor Manufacturing Company is the world’s largest contract manufacturer of chips used in everything from Apple iPhones to Nvidia’s cutting-edge artificial intelligence hardware.Huawei, the world’s leading equipment maker for fifth generation mobile internet networks, has been embroiled in a tech war between Beijing and Washington. The United States slapped sanctions on Huawei in 2019, and expanded them the following year, over fears its technology could be used for Beijing’s espionage operations. Huawei denies the allegations.The sanctions cut Huawei off from global supply chains that gave it access to the US-made components and technologies crucial to manufacturing powerful AI systems. The restrictions prevent TSMC from selling semiconductors to Huawei.But, TSMC discovered on October 11 that chips made for a “specific customer” had ended up with the Chinese company, a Taiwanese official with knowledge of the incident told AFP on the condition of anonymity.TSMC “immediately activated its export control procedures”, halting shipments to the customer and “proactively” notifying US and Taiwan authorities, the official said.In a statement on Wednesday, TSMC said it was a “law-abiding company” and had not supplied Huawei since mid-September 2020 in compliance with export controls. “We proactively communicated with the US Commerce Department regarding the matter in the report,” TSMC said, apparently referring to media reporting of the incident.”We are not aware of TSMC being the subject of any investigation at this time.”Taiwan’s economic ministry told AFP on Thursday that TSMC had informed them about the incident, but had not identified their client.”There was already an interaction and a contractual partnership in place, so it’s an old client,” the ministry said. They had been a client since before the 2020 deadline for companies to comply with the export controls, and “no shipments have been made since October 11”, it said.- Self-sufficiency -Bloomberg reported Tuesday that Canadian research firm TechInsights had found an advanced processor made by TSMC inside Huawei’s latest AI chip.Huawei did not respond to AFP’s request for comment.The company told Bloomberg that it hadn’t “produced any chips via TSMC after the implementation of the amendments made by the US Department of Commerce” to its trade restrictions targeting Huawei in 2020.The incident highlighted the lack of visibility into China’s domestic chip industry, said Chiang Min-yen, a non-resident fellow at the Research Institute for Democracy, Society, and Emerging Technology.”External parties lack sufficient information to understand which companies are actually under Huawei’s influence,” Chiang told AFP.In response to US export restrictions, Beijing has turbo-charged a drive for self-sufficiency in chips, with plans to pump billions of dollars into the sector.Huawei last year unveiled the Mate 60 Pro, a high-performance smartphone equipped with a chip that experts say would be impossible to produce without foreign technologies.That sparked debate about whether attempts to curb China’s technological advancements have been effective.

Asian markets mostly fell Thursday following steep losses on Wall Street as a spike in US Treasury yields led investors to scale back their expectations on interest rate cuts.With the US presidential election still seen as a coin toss less than two weeks out, there was plenty of uncertainty on trading floors, though observers said dealers were eyeing a win for Donald Trump and policies that could stoke inflation again.That, along with a strong run of economic data and remarks from Federal Reserve officials backing a cautious approach to easing monetary policy, has seen expectations for rate cuts whittled back.Traders had previously been confident that the central bank would follow up last month’s bumper 50-basis-point cut with another at its November meeting and a smaller one in December.But those expectations have diminished as Treasury yields push higher to 4.24 percent, compared with 3.73 percent in September.Observers said there is concern that a win for Trump over Democratic rival Kamala Harris could see him introduce tax cuts, ramp up trade tariffs and push for more deregulation.This has fuelled the so-called Trump trade, in which investors jockey for positions to prepare for such an eventuality.Sentiment has been “weighed down by the move up in yields and push back on Fed rate cut expectations”, said National Australia Bank’s Rodrigo Catril.”Solid economic momentum as well as Fed messaging emphasising a gradual and deliberate approach to further policy easing is making the market nervous,” he added. “Then once you add the upcoming US election alongside its associated uncertainty (higher or lower taxes?, more or less regulation?, new trade war?), taking some chips off the table makes sense.”All three main indexes on Wall Street finished well down, with the Nasdaq losing more than one percent.Hong Kong led the retreat in Asia, similarly shedding more than one percent, while Shanghai, Sydney, Seoul, Taipei, Bangkok, Mumbai, Jakarta and Manila were also lower.But Tokyo, Singapore and Wellington rose, along with London, Paris and Frankfurt.The dollar held gains after a drop in rate cut expectations pushed it up against its peers, bringing it to a near three-month high against the yen and a two-and-a-half-month high against sterling.Dealers will be keeping tabs on Tokyo ahead of next week’s Bank of Japan policy decision, which is expected to see it hold tight on borrowing costs, having hiked twice this year.Gold extended Wednesday’s drop from a record high as bonds offer better returns than the precious metal, which does not provide interest.And oil prices rose more than one percent, clawing back much of the previous day’s drop as dealers try to assess the demand outlook and the crisis in the Middle East amid fears about Israel’s plans to retaliate against Iran for this month’s missile attack.- Key figures around 0710 GMT -Tokyo – Nikkei 225: UP 0.1 percent at 38,143.29 (close)Hong Kong – Hang Seng Index: DOWN 1.3 percent at 20,489.62 (close)Shanghai – Composite: DOWN 0.7 percent at 3,280.26 (close)London – FTSE 100: UP 0.7 percent at 8,316.35Euro/dollar: UP at $1.0798 from $1.0787 on WednesdayPound/dollar: UP at $1.2968 from $1.2929Dollar/yen: DOWN at 152.21 yen from 152.65 yenEuro/pound: DOWN at 83.25 pence from 83.41 pence West Texas Intermediate: UP 1.7 percent at $71.94 per barrelBrent North Sea Crude: UP 1.5 percent at $76.09 per barrelNew York – Dow: DOWN 1.0 percent at 42,514.95 (close)

French luxury group Hermes posted Thursday a jump in third quarter sales, bucking the overall gloom in the sector caused by falling sales in China.The luxury house, famous for its leather bags and silk scarves, saw overall sales rising 10 percent to 3.7 billion euros ($4.0 billion) in the July to September period.China is the world’s biggest spender in the luxury sector, accounting for half of global sales. But as its post-pandemic recovery falters, consumption has flagged, sending jitters through the industry.”Hermes stands out from other big groups” Hermes’ chief financial officer Eric du Halgouet told journalists.Its main competitors, the world’s top luxury group LVMH and Kering (Gucci and Yves Saint Laurent) have both reported falling third quarter sales, drops of 4.4 percent and 15 percent respectively.In Hermes’s greater China region, which includes Macao and Taiwan, the “there was no reversal in the trend” of sales growth, said du Halgouet.The greater Asia region, which excludes Japan, posted 0.6 percent quarterly growth “despite the downturn in traffic in Greater China observed since the end of the Chinese New Year, and a high base in the third quarter last year,” the company said in a statement.Du Halgouet said the drop in footfall in Chinese stores was being made up for in increased spending per client, in particular on jewellery, leather goods and ready-to-wear clothing. Hermes also recently opened a 1,000 square-metre (10,800 square-foot) boutique in Shenzen and has plans to open two others in Shenyang and Beijing.The luxury group saw double-digit sales gains in its other major markets, including an 11 percent rise in the Americas and 18 percent increases in Europe and Japan.Du Halgouet said that sales in these regions were continuing at the same tempo as the fourth quarter got underway in October.Sales of leather goods, Hermes’s top segment, rose by 12.7 percent to 1.57 billion euros.Clothing and accessories rose by 12.1 percent to 1.13 billion euros.While CEO Axel Dumas evoked last month in a Financial Times interview the possiblity of Hermes launching into haute couture, du Halgouet said it wasn’t a project for the company in the short term but which could be added to the group’s overall strategy.