The US has ordered Taiwan’s TSMC (Taiwan Semiconductor Manufacturing Company) to halt shipments of advanced chips to Chinese customers starting Monday, Nov 11. This directive, according to a person familiar with the matter, concerns chips with 7-nanometer or more advanced designs, typically used in artificial intelligence (AI) applications such as AI accelerators and graphics processing units (GPUs).
The Department of Commerce sent a letter to TSMC imposing export restrictions on these sophisticated chips destined for China. This move comes in the wake of an earlier incident where TSMC informed the Commerce Department that one of its chips had been discovered in a Huawei AI processor, which is under scrutiny due to trade restrictions.
Tech research firm Tech Insights had dismantled the product, revealing the TSMC chip, suggesting a violation of export controls. Huawei, already on the US restricted trade list, requires suppliers to obtain a license before shipping goods or technology to the company. Any licence that could support Huawei’s AI operations is likely to be denied.
TSMC’s latest action follows a previous suspension of shipments to China-based chip designer Sophgo after a similar chip was identified in a Huawei AI processor. The chip found its way into Huawei’s Ascend 910B, released in 2022, regarded as the most advanced AI chip from a Chinese company. It remains unclear how the chip ended up in the processor.
The latest restrictions, which affect more companies, allow the US to evaluate whether other firms are bypassing restrictions and supplying chips to Huawei for its AI processors. Following the letter from the Commerce Department, TSMC informed affected clients of its decision to suspend shipments, effective from Monday. The Commerce Department declined to comment on the matter.
The restrictions are part of broader concerns among US lawmakers, both Republican and Democrat, about the adequacy of export controls on China and the enforcement of these measures by the Commerce Department. The action follows a 2022 move in which the Department sent “is-informed” letters to Nvidia and AMD, limiting their ability to export top AI chips to China.
Similar letters were sent to chip equipment makers like Lam Research, Applied Materials, and KLA, restricting tools for making advanced chips.
In addition, the Biden administration has been working on updating export rules regarding China. While new rules were drafted in July, including plans to add approximately 120 Chinese companies to the restricted entity list, they have not yet been published despite target dates.
Reuters
