Taiwan Semiconductor Manufacturing Company was accused by a group of its U.S. employees of concocting a “discriminatory scheme” that favors Taiwanese foreign workers.

The suit alleges that the world's largest contract manufacturer of chips -- used in everything from Apple iPhones to Nvidia's AI hardware -- unfairly favors Asian staff in terms of hiring, firing and working standards.

“Since Taiwan has related regulation to protect its own technologies, TSMC cannot produce 2-nanometer chips overseas currently,” said Kuo, according to a report in the Taipei Times. “Although TSMC plans to make 2-nanometer chips [abroad] in the future, its core technology will stay in Taiwan.”

China's Taiwan Affairs Office said on Wednesday that a U.S. order to Taiwan Semiconductor Manufacturing Co to halt shipments of advanced chips to Chinese customers undermines the interests of Taiwanese companies and raises tension across the Taiwan Strait.

A wider shipment ban on TSMC-made chips could affect a range of mainland businesses from electric vehicles to smartphones.