TSMC to halt production of advanced AI chips for China amid U.S. export controls

Taiwan Semiconductor Manufacturing Co. (TSMC) has informed its Chinese customers that production of advanced artificial intelligence (AI) chips will be suspended effective November 11.

According to a recent report by the Financial Times, the suspension specifically targets chips manufactured at advanced process nodes of 7 nanometers or smaller, impacting some of the most sophisticated AI-driven components designed for the Chinese market.

This decision follows mounting pressure from the U.S., which has enforced stringent restrictions on the sale and manufacturing of advanced GPU chips for AI applications in China. The U.S. government has expressed concerns that China's AI capabilities could be repurposed for cyber warfare or biological weapon development. The move underscores Washington's ongoing efforts to curb China’s access to advanced technology in light of national security concerns.

TSMC’s suspension aligns with recent enforcement measures, including a $500,000 fine imposed on New York-based GlobalFoundries earlier this month.

GlobalFoundries faced penalties for unauthorized shipments to SMIC, a Chinese chipmaker already on the U.S. sanctions list. As TSMC’s customers in China seek alternative solutions, any future production or sales of advanced AI chips by TSMC would require explicit authorization, likely involving U.S. regulatory oversight.

In a statement, TSMC reiterated its commitment to compliance with international export regulations but refrained from commenting on specific customer interactions.

The suspension comes as the U.S. Department of Commerce continues its investigation into how a TSMC-made chip ended up in a Huawei product, despite strict export controls on the Chinese telecommunications company. This latest move by TSMC highlights the intensified regulatory environment surrounding semiconductor exports to China.