• The U.S. has ordered TSMC to stop shipments of advanced chips to Chinese clients, targeting chips used in AI applications.
  • The order follows reports of a TSMC chip found in a Huawei AI processor, potentially violating U.S. export controls.
  • The U.S. action, affecting multiple firms, aims to prevent advanced chip diversion to Huawei and similar Chinese entities.

The United States has instructed Taiwan Semiconductor Manufacturing Co. (TSMC) to halt shipments of specific advanced chips to Chinese clients starting Monday.

The U.S. Department of Commerce reportedly sent TSMC a letter imposing restrictions on the export of chips with 7-nanometer technology or more advanced designs. These chips are essential for powering AI accelerators and graphics processing units (GPUs), which are widely utilized in AI developments. 

The order came shortly after TSMC informed U.S. authorities that one of its chips had been found within an AI processor from Huawei, a Chinese tech giant under extensive U.S. trade restrictions.

Huawei, the primary focus of this U.S. action, is on a restricted trade list requiring suppliers to obtain licenses to send any goods or technology to the company. Licenses that might support Huawei's AI development are likely to be denied.

TSMC also halted shipments to China-based chip designer Sophgo after one of its chips was identified as matching the chip found in Huawei's AI processor.

This latest U.S. action impacts more companies and aims to assess if other firms are routing advanced chips to Huawei for its AI projects. Following the directive, TSMC notified affected clients that shipments of these restricted chips would cease starting Monday.

The U.S. Commerce Department declined to comment. A spokesperson for TSMC also declined to comment beyond saying it was a “law-abiding company…committed to complying with all applicable rules and regulations, including applicable export controls.” 

Taiwan’s Ministry of Economic Affairs confirmed that TSMC regularly consults with the government on export control matters and will adhere to both domestic and international regulations.

Edited by Harshajit Sarmah