(Reuters) -Taiwan Semiconductor Manufacturing Co (TSMC) (TSM) informed Chinese chip design companies that it was suspending production of their most advanced AI chips starting Monday, the Financial Times reported, citing three people familiar with the matter.
TSMC, the world’s largest contract chipmaker, has told Chinese customers it will no longer make AI chips on advanced process nodes 7 nanometers or smaller, the FT reported on Friday.
The United States has imposed a series of measures aimed at restricting the shipment of advanced GPU chips – which enable AI – to China in order to hamper its artificial intelligence capabilities, which Washington fears could be used to develop biological weapons and launch large-scale cyberattacks.
Earlier this month, the United States imposed a $500,000 penalty on New York-based GlobalFoundries for shipping chips without authorization to a subsidiary of blacklisted Chinese chipmaker SMIC.
Any future supplies of advanced AI chips by TSMC to Chinese customers would be subject to an approval process likely to involve Washington, according to the FT report.
“TSMC does not comment on market rumors. TSMC is a law-abiding company and we are committed to complying with all applicable rules and regulations, including applicable export controls,” the company said.
The U.S. Commerce Department did not immediately respond to a Reuters request for comment.
The decision to restrict exports to China comes at a time when the U.S. Commerce Department is investigating how a chip produced by the Taiwanese chipmaker ended up in a product made by heavily sanctioned Chinese company Huawei.
(Reporting by Rishi Kant in Bengaluru; editing by Mrigank Dhaniwala and Shounak Dasgupta)