TSMC will stop supplying advanced chips to China

THE TECHNOLOGY WAR CONTINUES:
The suspension of TSMC AI chips and GPUs will be a heavy blow to China’s chip designers and affect its competitive advantage

• Written by: Lisa Wang / Staff Reporter

Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chip manufacturer, will reportedly stop supplying artificial intelligence (AI) chips and graphics processing units (GPUs) produced with 7-nanometer or more advanced process technologies starting next week. To comply with US Department of Commerce rules.

TSMC sent emails to Chinese AI customers informing them of the suspension starting Monday, Chinese online news outlet Ijiwei.com (愛集微) reported yesterday.

The U.S. Department of Commerce has yet to officially announce any further semiconductor measures against China.

Photo: Chiang Ying-ying, AP

“TSMC does not comment on market rumors. TSMC is a law-abiding company and we are committed to complying with all applicable rules and regulations, including applicable export controls,” TSMC said in an email yesterday.

The report said the chip maker’s move comes as it faces increasing pressure from the US department to comply with semiconductor restrictions and underlines the escalation in the Sino-US technology war.

Last week, TSMC stopped shipping 7-nanometer chips to China-based chip designer Sophgo Technologies Ltd (算能科技) after a chip it produced itself was found in the Huawei Technologies Co (華為) artificial intelligence chip.

The report stated that the suspension of TSMC chips would deal a heavy blow to China’s artificial intelligence and GPU designers and weaken their chip performance and competitive advantage.

He added that TSMC could get greater business opportunities from the US by following the rules of the commerce department.

Taiwan’s chip companies have been warned to prepare for tougher regulations after new US president Donald Trump won the election.

Trump last month accused Taiwan of “stealing” the US chip industry and threatened to impose tariffs on chips from Taiwan.

Since TSMC is a major supplier of advanced chips to Nvidia Corp, Advanced Micro Devices Inc and Intel Corp, any tariff increases could inflate electronics prices and increase U.S. inflation; It is not yet known whether Trump will impose broad or selective tariffs, Macronix International Co said. (旺宏) chairman Miin Wu (吳敏求) said on Thursday.

Macronix is ​​the world’s largest supplier of NOR flash memory chips.

In order to protect U.S. advances in AI technology, given the rising tensions between Taiwan and China, there is a possibility that the U.S. may request TSMC to produce all cutting-edge chips, including the most advanced chips, in the U.S., Wu said.

Wu added that without sufficient bargaining power, it may be difficult for TSMC and the government to turn down the request.

TSMC will ramp up production of 4-nanometer chips at its first U.S. factory in Arizona next month. The chipmaker plans to build two more advanced factories in Arizona for the production of 2-nanometer and more advanced chips in the US.