U.S. Orders TSMC to Halt Advanced AI Chip Exports to China Amid Heightened Trade Restrictions

U.S. Mandates Halt of TSMC Advanced AI Chip Exports to China

The United States has directed Taiwan Semiconductor Manufacturing Co. (TSMC) to cease shipments of advanced semiconductor chips used in artificial intelligence (AI) applications to Chinese customers. Starting Monday, the U.S. Department of Commerce imposed export restrictions on chips designed at 7 nanometers or smaller, impacting high-tech processors commonly used in AI and graphics processing units (GPUs), according to a source familiar with the matter.

Why TSMC’s Exports Are Halted

The order followed an incident reported last month where one of TSMC’s chips was found in a Huawei AI processor, possibly violating U.S. export controls. Huawei remains on the U.S. restricted trade list, meaning suppliers must obtain specific licenses to supply goods or technology to the company, especially for AI-related products. This restriction is part of the U.S. effort to curtail China's access to critical AI hardware.

Broader Industry Impact

In response, TSMC has informed its affected Chinese clients of suspended shipments. Chinese semiconductor firms, including chip designers like Sophgo, will experience delays and potential setbacks in accessing cutting-edge AI chip technology. This restriction is part of a larger initiative: in 2022, similar "is-informed" letters were sent to Nvidia and AMD, limiting exports of advanced AI chips to China.

With bipartisan U.S. political support, these measures reflect growing national security concerns around AI capabilities. The new restrictions will expedite U.S. oversight of export compliance for other semiconductor firms exporting to China.