SINGAPORE: The United States has ordered Taiwan Semiconductor Manufacturing Co (TSMC) to halt shipments of advanced chips to Chinese customers that are often used in artificial intelligence (AI) applications starting today, according to a person familiar with the matter.
The Department of Commerce sent a letter to TSMC imposing export restrictions on certain sophisticated chips, of seven nanometre or more advanced designs, destined for China that power AI accelerator and graphics processing units (GPU), the person said.
The US order, which is being reported for the first time, 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 had taken apart the product, revealing the TSMC chip and apparent violation of export controls.
Huawei, at the centre of the US action, is on a restricted trade list, which requires suppliers to obtain licences to ship any goods or technology to the company. Any licence that could aid Huawei’s AI efforts would likely be denied.
TSMC suspended shipments to China-based chip designer Sophgo after its chip matched the one found on the Huawei AI processor, sources told Reuters last month.
Reuters could not determine how the chip ended up on Huawei’s Ascend 910B, released in 2022, viewed as the most advanced AI chip available from a Chinese company.
The latest clampdown hits many more companies and will allow the United States to assess whether other companies are diverting chips to Huawei for its AI processor.
As a result of the letter, TSMC notified affected clients that it was suspending shipments of chips starting today, the person said.
The Commerce Department declined to comment.
A spokesperson for TSMC also declined to comment beyond saying it was a “law-abiding company committed to complying with all applicable rules and regulations, including applicable export controls.”
The Commerce Department communication – known as an “is informed” letter – allows the United States to bypass lengthy rule-writing processes to quickly impose new licensing requirements on specific companies.
Ijiwei, a Chinese media site covering the semiconductor industry, reported last Friday that TSMC notified Chinese chip design companies it would suspend seven nanometre or below chips for AI and GPU customers beginning Nov 11.
The action comes as both Republican and Democratic lawmakers have raised concerns about the inadequacy of export controls on China and the Commerce Department’s enforcement of them.
In 2022, the Commerce Department sent is-informed letters to Nvidia and AMD restricting their ability to export top AI-related chips to China, and to chip equipment makers like Lam Research, Applied Materials and KLA to restrict tools to make advanced chips to China.
The restrictions in those letters were later turned into rules that apply to companies beyond them.
The United States has been delayed in updating rules on tech exports to China. — Reuters
