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Taiwan Semiconductor Manufacturing Company has informed Chinese chip design companies that it will suspend production of its most advanced artificial intelligence chips, as Washington continues to hamper Beijing’s AI ambitions.
TSMCthe world’s largest contract chipmaker, told its Chinese customers it will no longer make AI chips on advanced process nodes 7 nanometers or smaller starting next Monday, three people familiar with it said of the file.
Two of those people said any future supplies of such semiconductors by TSMC to Chinese customers would be subject to an approval process that could involve Washington.
TSMC’s tougher rules could reset the ambitions of Chinese tech giants such as Alibaba and Baidu, which have invested heavily in designing semiconductors for their AI clouds, as well as a growing number of startups AI chip design ups who turned to the Taiwanese group for their needs. manufacturing.
The United States has banned American companies like Nvidia from shipping cutting-edge processors to China and has also created a extensive export control system to prevent chipmakers around the world that use American technology from shipping advanced AI processors to China. A new U.S. rule would ban foundries from making advanced AI chips designed by Chinese companies, according to analysts at investment bank Jefferies.
TSMC rolls out new policy as US Department of Commerce study how Cutting-edge chips made by the group for a Chinese client ended up in a Huawei AI device. China’s national technology champion is subject to multiple U.S. sanctions and export controls.
People familiar with TSMC’s decision said its decision was driven by a “combination” of the need to improve internal controls following this ongoing investigation and the next wave of U.S. controls on chip exports to China, expected before the departure of American President Joe Biden. desk.
“We want to start mitigating the effects before there are strong, structured regulations,” one of the sources said.
The company is particularly wary of being targeted because it is unreliable or uncooperative. Donald Trump is ready to become the next president of the United States.
This year, Trump accused Taiwan of “stealing” the U.S. chip industry and suggested TSMC might bring production back home after pocketing billions of dollars in subsidies from Washington to build manufacturing plants in the United States.
A person close to TSMC said the move was “not a show for Trump but clearly designed to emphasize that we are the good guys and not acting against American interests.”
Being cut off from TSMC could hurt Chinese tech giants that have bet on manufacturing their most advanced AI chips in Taiwan. Search giant Baidu, in particular, aims to create a full stack of software and hardware to support its AI business.
At the center of these efforts is its Kunlun series of AI chips. Its Kunlun II processor is manufactured by TSMC on its 7-nanometer miniaturization level, according to Bernstein Research.
“Kunlun chips are now particularly well suited for large model inference and will ultimately be suitable for training,” Baidu founder Robin Li said at a conference last year. Li added that the group had managed to reduce costs by designing its own chips.
People briefed on the situation said TSMC’s new rules were clearly targeted at AI processors, but it was unclear until now to what extent they would be applied to other chips. China has a number of high-profile startups designing AI chips for autonomous driving, including Hong Kong-listed Horizon Robotics and Black Sesame International Holding.
Executives and company documents from both groups indicated that their new generation of chips will be manufactured by TSMC on the 7-nanometer node.
Those close to TSMC said its new restrictions would not have a major impact on its revenue. TSMC’s October revenue rose 29.2 percent to NT$314 billion ($9.8 billion), a slight deceleration in growth from previous months.
In a statement, TSMC said it is “a law-abiding company and we are committed to complying with all applicable rules and regulations, including applicable export controls.”
The news was first reported by Chinese media site ijiwei.com.
Nian Liu contributed reporting from Beijing.