US Orders TSMC To Halt AI Chip Shipments To China Amid Huawei Concerns

The US Department of Commerce has directed Taiwan Semiconductor Manufacturing Co. (TSMC) to suspend shipments of advanced chips to China. These chips, designed for AI applications, are now subject to stringent export controls starting Monday.

Huawei at the Center of Controversy

This decision follows the discovery of a TSMC chip in Huawei’s AI processor, raising concerns over potential export control violations. Huawei, already on a restricted trade list, is under scrutiny for its AI advancements.

What Are “Is-Informed” Letters?

The US Commerce Department issued an “is informed” letter to TSMC, enabling swift action without the need for lengthy rule-making processes. This approach allows the US to impose licensing requirements on specific companies quickly.

Impact on Chinese Tech Industry

The restrictions affect multiple Chinese companies, not just Huawei. TSMC has already notified its clients, including China-based chip designer Sophgo, about halting shipments of 7-nanometer and below chips for AI and GPU applications.

Broader Context of US-China Tech Tensions

This move is part of a broader effort by the US to limit China’s access to cutting-edge technology. Similar restrictions were previously imposed on Nvidia, AMD, and other chip equipment makers.

Industry Reactions

TSMC and Taiwan’s economy ministry reiterated their commitment to complying with export controls. However, the restrictions underscore ongoing concerns in Washington over enforcing tech export rules to China.