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TSMC Suspends Production of Advanced AI Chips for Chinese Customers
Taiwan Semiconductor Manufacturing Company (TSMC) has notified Chinese chip design companies that it will suspend production of their most advanced artificial intelligence (AI) chips. This move comes as Washington continues to impede Beijing’s AI ambitions.
TSMC, the world’s largest contract chipmaker, told Chinese customers it would no longer manufacture AI chips at advanced process nodes of 7 nanometres or smaller as of this coming Monday, three people familiar with the matter said.
The company’s decision is driven by a “combination” of the need to improve internal controls in the wake of an ongoing probe into how cutting-edge chips made for a Chinese customer ended up in a Huawei AI device, and the next wave of US export controls on chip supplies to China, expected before US President Joe Biden leaves office.
Impact on Chinese Tech Giants
The move could reset the ambitions of Chinese technology giants such as Alibaba and Baidu, which have invested heavily in designing semiconductors for their AI clouds. The decision may also affect a growing number of AI chip design start-ups that have turned to TSMC for manufacturing.
Executives and company materials at both groups have indicated their newest generation of chips would be made by TSMC on the 7-nanometre node.
TSMC’s Commitment to Compliance
In a statement, TSMC said it was a “law-abiding company and we are committed to complying with all applicable rules and regulations, including applicable export controls.”
Conclusion
TSMC’s decision to suspend production of advanced AI chips for Chinese customers is a significant development in the ongoing tensions between Washington and Beijing. The move is likely to have a significant impact on Chinese tech giants and AI chip design start-ups that rely on TSMC for manufacturing.
FAQs
Q: Why is TSMC suspending production of advanced AI chips for Chinese customers?
A: TSMC is suspending production due to the need to improve internal controls and comply with upcoming US export controls on chip supplies to China.
Q: What is the impact on Chinese tech giants?
A: The move could reset the ambitions of Chinese technology giants such as Alibaba and Baidu, which have invested heavily in designing semiconductors for their AI clouds.
Q: Will TSMC’s decision affect other chip types?
A: It is unclear how widely TSMC’s new rules will be applied to other chips.
