TSMC has informed its AI chip customers in mainland China via an official email that it will suspend the supply of all chips manufactured using 7nm or more advanced processes to AI/GPU customers in the region, effective November 11. Credit:TSMC.
TSMC informed its AI chip clients in mainland China, via an official email, that it would suspend the supply of chips manufactured with 7nm or more advanced processes for AI/GPU customers within the region as of November 11. A TSMC insider told Chinese news outlet Icsmart that the decision was a temporary strategy imposed by the US government. Why it matters: The suspension is a sign of the escalating US-China tech tensions. It could disrupt the AI advancements of Chinese tech companies and their operations. The US’s chip banning may impact global supply chain strategies, and lead to a shift towards self-sufficiency in China and alternative suppliers.
Details While TSMC is negotiating with the US to limit the impact on AI chip customers, they are attempting to impose a broad restriction on Chinese companies that use TSMC’s processes below 7nm.
- According to Icsmart, the US was shocked by a previously sanctioned Chinese firm that used “middlemen”to place orders with TSMC to secure advanced process capacity for self-developed AI chip. The US believes that it is necessary to block attempts to bypass new semiconductor restrictions in China. TSMC would be the first to be affected if new rules were introduced to close these holes.
- US wants to impose a blanket ban on Chinese companies that use TSMC’s advanced processes below 7nm for all chip production. TSMC hopes the restrictions will only apply to Chinese companies that are involved in AI chips and not impact other customers such as those in smartphone chip manufacturing. An insider told Icsmart that TSMC was currently discussing how it would respond to the new US regulation, and that negotiations were ongoing about the impact of the new regulations on customers other than AI chips.
Context Donald Trump won last week’s US presidential election. The country is now in a transition period between the current Biden and the upcoming Trump Administration. It is unclear whether the current Biden Administration will introduce new semiconductor limitations on China before Trump officially assumes office or if it will leave this to the Trump Administration to handle.
Jessie Wu, a Shanghai-based tech reporter, is a member of the team. She covers the gaming, semiconductor and consumer electronics industries for TechNode. Connect with her via e-mail: jessie.wu@technode.com. More by Jessie Wu
