TSMC Halts Production Of Advanced AI Chips For Chinese Companies Starting November 11: Report

This move comes amid ongoing tensions between the US and China over technological competition, particularly in the field of artificial intelligence.

US has implemented a series of restrictions aimed at limiting the shipment of high-performance GPU chips, which are crucial for AI development, to China.

Source : Unsplash/Vishnu Mohanan

Taiwan Semiconductor Manufacturing Co (TSMC) has reportedly informed Chinese chip design companies that it will halt the production of their most advanced AI chips starting Monday, according to a Financial Times article citing three sources familiar with the situation. TSMC, which holds the title of the world’s largest contract chipmaker, has notified its Chinese clients that it will no longer be producing AI chips using advanced process nodes smaller than 7 nanometres, as of the specified date.

This move comes amid ongoing tensions between the US and China over technological competition, particularly in the field of artificial intelligence. The US has implemented a series of restrictions aimed at limiting the shipment of high-performance GPU chips, which are crucial for AI development, to China. These actions are part of a broader effort by Washington to curb China's technological advancements, fearing that these AI capabilities could be leveraged for purposes such as developing bioweapons or conducting large-scale cyberattacks.

US Imposes $500,000 Fine On Semiconductor Manufacturer

In a related development earlier this month, the US imposed a hefty fine of $500,000 on GlobalFoundries, a semiconductor manufacturer based in New York, for sending chips without the necessary authorization to an affiliate of the Chinese chipmaker SMIC, which is blacklisted. The Financial Times article suggests that any future shipments of advanced AI chips from TSMC to Chinese customers will likely require approval from US authorities, further complicating the supply chain.

The company said, "TSMC does not comment on market rumour. TSMC is a law-abiding company and we are committed to complying with all applicable rules and regulations, including applicable export controls."

The decision to limit exports to China comes as the US Department of Commerce is investigating how a chip manufactured by the Taiwanese company found its way into a product produced by Huawei, a Chinese firm subject to heavy sanctions.