The United States directs Taiwan Semiconductor Manufacturing Company (TSMC) to stop supplying its advanced 7-nanometer and smaller chips to Chinese customers starting November 11. This directive, communicated by the US Department of Commerce through a direct “is informed” letter, is focused on reducing China’s access to chips vital for artificial intelligence (AI) and graphics processing. The order follows a discovery that a TSMC chip was found in a Huawei AI processor, raising concerns over compliance with US trade rules. Huawei, which is on a restricted list, requires special approval for technology shipments, which the US government is unlikely to grant for advanced AI purposes. TSMC has informed its Chinese clients, including the chip designer Sophgo, about the suspension of shipments.
This new restriction is part of the US government’s broader strategy to limit China’s technology advancements in AI and military-related fields. The US has previously imposed similar restrictions on major chipmakers like Nvidia and AMD, along with chip equipment suppliers, to prevent China from obtaining advanced tools for chip production. The current order is expected to impact several Chinese technology companies that depend on TSMC’s chips for AI research, high-performance computing and military applications.
Looking ahead, the US government is expected to expand its list of restricted Chinese companies believed to be using advanced chips for military purposes. While the Biden administration had planned to introduce stricter export control rules in August, these updates have been delayed. Taiwan’s Ministry of Economic Affairs has confirmed that TSMC will follow international trade laws and TSMC has highlighted its commitment to comply with all export regulations. This decision highlights the increasing US-China tech rivalry as both countries seek to lead in AI and other high-tech sectors.
