Exclusive-US ordered TSMC to halt shipments to China of chips used in AI applications, source says
By Karen Freifeld and Fanny Botkin
NEW YORK/SINGAPORE (Reuters) – The United States ordered Taiwan Semiconductor Manufacturing Co to halt shipments of advanced chips to Chinese customers that are often used in artificial intelligence applications as of Monday, according to a person familiar with the matter.
The Commerce Department sent a letter to TSMC imposing export restrictions on certain high-end chips, 7nm or more advanced, destined for China that power its AI accelerator and graphics processing units (GPUs), the person said.
The US order, which was first reported, comes just weeks after TSMC notified the Commerce Department that one of its chips had been found in a Huawei AI processor, as Reuters reported last month. Tech research firm Tech Insights dismantled the product, revealing a TSMC chip and an apparent violation of export controls.
Huawei, at the heart of the US action, is on the restricted trade list, which requires suppliers to obtain licenses to ship any goods or technology to the company. Any license that could aid Huawei’s AI efforts will likely be denied.
TSMC suspended shipments to China-based chip designer Sophgo after its chip matched the one in Huawei’s AI processor, sources told Reuters last month.
Reuters was unable to determine how the chip ended up in Huawei’s Ascend 910B processor, released in 2022, which is seen as the most advanced AI chip available from a Chinese company.
The latest crackdown hits several companies and will allow the US to assess whether other companies are transferring chips to Huawei for its AI processor.
As a result of the letter, TSMC notified affected customers that it would suspend chip shipments starting Monday, the person said.
The Ministry of Commerce declined to comment.
A TSMC spokesperson also declined to comment, saying only that it is a “law-abiding company…committed to complying with all applicable rules and regulations, including applicable export controls.”
The Commerce Department’s communications – known as an “informed” letter – allow the United States to bypass lengthy rule-writing processes to quickly impose new licensing requirements on specific companies.
Ijiwei, a Chinese media website covering the semiconductor industry, reported on Friday that TSMC has notified Chinese chip design companies that it will suspend 7nm or lower chips for AI and GPU customers starting on November 11.
The action comes as Republican and Democratic lawmakers have raised concerns about inadequate export controls on China and the Commerce Department’s enforcement of them.
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