Taiwan Semiconductor Manufacturing Company (TSMC) has informed Chinese chip design firms that it will suspend the production of their most advanced AI chips starting Monday, according to a report from the Financial Times, which cited three sources familiar with the situation. TSMC, the world’s largest contract chipmaker, conveyed to its Chinese customers that it will no longer manufacture AI chips at advanced process nodes of 7 nanometers or smaller. This decision comes as the U.S. has implemented a series of measures aimed at restricting the export of advanced GPU chips, which are essential for AI technology, to China.
The U.S. government is concerned that these technologies could be used to develop bioweapons or conduct large-scale cyberattacks. Earlier this month, the U.S. imposed a $500,000 penalty on GlobalFoundries, a New York-based company, for shipping chips without authorization to a subsidiary of the blacklisted Chinese chipmaker SMIC.
Any future supply of advanced AI chips from TSMC to Chinese clients will likely require an approval process involving U.S. authorities, according to the Financial Times report. TSMC stated, “We do not comment on market rumors. TSMC is a law-abiding company and we are committed to complying with all applicable rules and regulations, including export controls.” The U.S. Department of Commerce did not immediately respond to a request for comment from Reuters.
This export restriction occurs amid an investigation by the U.S. Department of Commerce into how a chip produced by TSMC ended up in a product manufactured by Huawei, a Chinese company that is heavily sanctioned.