TSMC to Halt Advanced AI Chip Production for Chinese Firms Starting from Monday, Report Says
1min read Taiwan Semiconductor Manufacturing Company (TSMC) has informed Chinese chip design companies that it will halt production of their advanced AI and high-performance computing chips starting Monday, according to a Financial Times report citing three sources.
The suspension affects AI semiconductors produced with advanced process nodes of seven nanometers or smaller. TSMC added that the decision might be reconsidered if the U.S. approves cooperation with certain Chinese enterprises.
The affected clients are those working on high-performance computing, GPUs, and AI computing-related applications using 7-nanometer or better technologies. The suspension does not impact those making mobile, communication, and connectivity-related chips. Sources stated that the overall impact on TSMC's revenue would be minimal.
Future supplies of such semiconductors to Chinese customers will require approval, likely involving Washington, according to the report. TSMC emphasized its commitment to complying with all applicable rules and regulations, including export controls.
The company has reviewed customers using 7-nm or better technologies after suspecting attempts by Chinese clients to circumvent U.S. export controls on Huawei Technologies. TSMC proactively notified the U.S. Department of Commerce about these customers.
One source mentioned that TSMC's decision aims to avoid violating U.S. export control rules and is unrelated to the U.S. presidential election. Another source highlighted that Chinese customers with high-computing chip designs must confirm with the Bureau of Industry Security (BIS) of the U.S. Department of Commerce before TSMC can produce their chips.
China accounted for roughly 12% of TSMC's total revenue last year, while the U.S. contributed 65%. In the most recent quarter, U.S. clients accounted for 71% of TSMC's revenue, and China's contribution was 11%.
The U.S. has imposed export controls on Huawei and broader technology restrictions to curb China's semiconductor ambitions. Additionally, the U.S. has stationed an export control officer in Taipei to oversee compliance in China Taiwan, Japan, and South Korea.