US Orders Taiwan Semiconductor Manufacturing Company To Halt Shipments Of AI Chips To China

The United States has ordered Taiwan Semiconductor Manufacturing Company (TSMC) to suspend shipments of AI chips to China, following concerns over possible violations of export controls, as first reported by Reuters.

This action is part of ongoing efforts by U.S. lawmakers to tighten export controls on China’s semiconductor industry amid concerns over national security and technological competition.

The order, reported for the first time on November 10, comes after TSMC disclosed to the US Commerce Department that one of its chips was found in a Huawei AI processor, as reported by Reuters.

The chip was discovered by tech research firm Tech Insights, which had examined the product and flagged a potential violation of export regulations.

Huawei, a company on the U.S. restricted trade list, requires licenses to receive any goods or technology from foreign suppliers, particularly items that could support its AI efforts. Any such licenses are likely to be denied, said Reuters.

TSMC had already suspended shipments to China-based Sophgo after a chip from the company was linked to the Huawei AI processor, which powers Huawei’s Ascend 910B, released in 2022 and regarded as one of the most advanced AI chips from a Chinese company, noted Reuters.

The latest restrictions impact a broader range of companies, enabling the U.S. to investigate whether other entities are inadvertently supplying Huawei with AI chips, said Reuters.

The U.S. rules do not impose a complete ban on TSMC producing chips for China. Instead, they require the Taiwanese company to verify that its Chinese customers have not requested chips with advanced capabilities, noted The New York Times.

As part of the action, TSMC informed clients on November 10 that shipments of chips, including those with 7-nanometer or smaller designs used in AI and GPU applications, would be suspended starting November 11.

Both TSMC and Taiwan’s economy ministry emphasized the company’s commitment to complying with export regulations, though TSMC declined to provide further comment, said Reuters.

The Times notes that experts argue that it’s difficult to assess a chip’s power based solely on its design, making it challenging for TSMC to verify whether the chips ordered by its Chinese customers comply with U.S. requirements.