US Asks TSMC To Halt Shipments Of Advanced Chips To China: Report

The United States has ordered Taiwan Semiconductor Manufacturing Co. (TSMC) to suspend shipments of advanced semiconductor chips to China, a move that significantly impacts the Chinese tech industry’s access to critical AI technologies, as per a Reuters report. 

The restrictions, which target chips with designs of 7 nanometers or more advanced, are designed to curb China's access to components that power artificial intelligence (AI) accelerators and graphics processing units (GPUs).

This action comes after a report in which a TSMC chip was found in a Huawei AI processor, raising concerns that the Chinese tech giant may have violated US export controls. A source familiar with the matter told Reuters that the US Department of Commerce sent a letter to TSMC, imposing the export restrictions on specific chips bound for China. TSMC informed its affected clients that shipments would be halted starting Monday.

Huawei, a company that is already on a US restricted trade list, faces additional scrutiny as it continues its AI development efforts. Under the terms of the U.S. restrictions, any licenses for goods or technology that could enhance Huawei’s AI capabilities are unlikely to be approved. The discovery of the TSMC chip in Huawei’s Ascend 910B AI processor, considered one of the most advanced in China, has raised alarms in Washington. TSMC had previously suspended shipments to the China-based chip designer Sophgo after a similar issue involving the same chip type.

This latest clampdown extends beyond Huawei, as the US seeks to assess whether other Chinese companies might be diverting advanced chips for use in Huawei's AI projects. The restrictions are part of broader efforts by both Republican and Democratic lawmakers to tighten export controls on China’s semiconductor industry, as concerns grow over China's ability to accelerate its AI capabilities.

The Commerce Department’s action comes amid ongoing delays in formalising new export control rules. While the Biden administration had planned to issue updated rules on tech exports to China earlier this year, the final regulations have not yet been released. In 2022, the US had already placed similar restrictions on companies like Nvidia and AMD, limiting their ability to export AI-related chips to China, alongside curbs on semiconductor manufacturing equipment.

TSMC has not publicly commented beyond reaffirming its commitment to complying with all relevant laws and regulations, including export controls.

(Inputs from Reuters)