A severe blow to China TSMC stops manufacturing advanced chips for Chinese companies
Taiwan Semiconductor Manufacturing Company (TSMC) has decided to suspend production of advanced chips for artificial intelligence for Chinese companies, according to a report published by the Financial Times.
According to the report, the Taiwanese company has informed its customers in China of its decision to stop manufacturing advanced chips with manufacturing technologies of 7 nanometers or smaller, starting next Monday.
After this decision comes into effect, Chinese companies that order this class of chips will have to undergo strict procedures that may include approval from the US government.
The decision is believed to have come after TSMC discovered that Huawei had used its AI chips without its knowledge.
Canadian research firm Tech Insights said it informed TSMC that its chips were found in Huawei devices.
This is a violation of trade sanctions imposed by the US Department of Commerce on Huawei since 2020, which have prevented the Chinese company from obtaining chips from foreign companies.
The US recently revoked licenses that allowed companies like Intel and Qualcomm to manufacture chips for Huawei devices.
According to the report, TSMC has notified the US Department of Commerce of the results of TechInsights' investigations, and it is currently investigating how this happened.
TSMC has denied any business relationship with Huawei, and has stopped selling chips to a customer it believes was illegally reselling them to the Chinese company.
TSMC's decision to suspend production of AI chips for Chinese customers is part of its effort to demonstrate its commitment not to act in conflict with US interests, Financial Times sources said.
This new policy is expected to have a significant impact on Chinese companies’ plans in the field of artificial intelligence, as companies such as Baidu were planning to develop AI-based devices based on chips manufactured by TSMC.