TSMC has denied that it is being investigated by US authorities over its dealings with Chinese tech company Huawei, after reports emerged that its chips were found inside the Shenzhen-based company's products.

“TSMC is a law-abiding company and we are committed to complying with all applicable rules and regulations, including export control regulations,” a TSMC spokesperson told CNBC.

Tech publication The Information reported last week that the US Commerce Department is investigating whether TSMC is manufacturing artificial intelligence (AI) chips or smartphones for Huawei in violation of US export regulations.

"We are proactively communicating with the U.S. Department of Commerce regarding the reported issue. We are not aware of TSMC being the subject of any investigation at this time," a TSMC spokesperson added.

Huawei was placed on a US trade blacklist in May 2019 over national security concerns.

TSMC, the world's largest contract chipmaker, said it has not supplied chips to Huawei since mid-September 2020.

Separately, Reuters reported on Tuesday that one of TSMC's chips was recently found in a Huawei product, suggesting a possible violation of the export ban that prompted the chipmaker to file a report with the U.S. Commerce Department.

Citing anonymous sources, the report said the discovery was made after technology research firm TechInsights disassembled a Huawei product and found a TSMC chip that was part of a multi-chip system.

TechInsights has yet to publicly release a report on the results of its findings and has not responded to CNBC's request for comment.

Meanwhile, TSMC declined to comment further on the specific claims in the Reuters report.

Huawei and its access to advanced semiconductor technology have drawn attention since releasing a smartphone with a 5G chip, technology the US has sought to restrict the company's access to.

It is not known whether TSMC "leaked" chips to Huawei or somehow the Chinese company got this advanced technology, but the information spread in front of the eyes caused TSMC's stock to drop 1.4% in today's trading day.

(According to CNBC)