China’s tech firms fear bigger curbs as TSMC stops AI chip supply on US order

A wider shipment ban on TSMC-made chips could affect a range of mainland businesses from electric vehicles to smartphones

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TSMC has stopped taking advanced AI chip orders from mainland Chinese clients. Photo: Reuters

Che Panin BeijingandWency Chenin Shanghai

Published: 9:00pm, 12 Nov 2024Updated: 9:29pm, 12 Nov 2024

Mainland China’s chip design firms are anxiously waiting for any further updates from Taiwan Semiconductor Manufacturing Company (TSMC), after the world’s most advanced contract chip manufacturer paused 7-nanometre node services for some artificial intelligence (AI) chip clients in the world’s largest semiconductor market by consumption.

TSMC last week told graphics-processing-unit (GPU) and AI-accelerator clients on the mainland that their access to advanced processing services would be halted from Monday, the Post reported. Those restrictions were ordered by the US Commerce Department, according to a Reuters report citing an unnamed source.

Now questions have emerged in mainland China about whether TSMC would expand its shipment ban on advanced-node products to include central processing units (CPUs), autonomous-driving chips, high-end smartphone chips or other products in high demand in the country.

TSMC declined to comment on specifics on Monday, but said it would comply with applicable rules and regulations, including export controls.

A Canadian research firm said it found a TSMC-made AI chip in a Huawei product. Photo: AP Photo

The company tightened shipments to the mainland after Canadian integrated-circuit research firm TechInsights found a TSMC-made AI chip in a Huawei Technologies AI training card. The discovery suggested that US sanctions on the Shenzhen-based tech giant were compromised. TSMC denied any wrongdoing.