US tells TSMC to halt shipments of advanced AI, GPU chips to China

The US Department of Commerce has instructed Taiwan foundry TSMC to stop exporting AI processing and GPU chips to China that are made using 7nm or more advanced manufacturing process nodes, according to a Reuters report.

The DoC sent an “is-informed” letter to TSMC rather than going through the lengthy regulatory process of drawing up export restrictions. The letter calls for the stop with effect from today Monday November 11, the report said.

The US has already implemented a series of export licensing restrictions that apply to all US companies and the refer to specific Chinese companies on the so-called entity list. Such companies as Huawei and SMIC are prominent on the list with the US using the justification that these companies have links to the People’s Liberation Army.

However, concerns have surfaced that Chinese buyers are circumventing these regulations through third-parties. Recently TSMC suspended shipments to a customer Xiamen Sophgo, after a chip made for that company was found in a Huawei Ascend 910B multi-die AI processor, according to Reuters.

TSMC has notified relevant customers that it was suspending shipments of chips starting Monday, the report said referencing an unnamed source.

It remains unclear whether the ban is also set to impact AI-capable processors intended for us in smartphones. This would impact such phone makers as Xiaomi, Oppo, Vivo and Honor as well as Huawei.

Chinese customers with advanced processing needs may try and turn to Korea’s Samsung and domestic foundry SMIC. However, if Samsung responded it would likely be hit with similar “is-informed” letter if it has not been already. SMIC can nominally achieve 7nm processing but to go beyond that is increasingly difficult due to SMIC’s lack of access to advanced chip manufacturing equipment.