The directive comes from the US Department of Commerce, in relation to the export of chips that are essential for graphics processing units and AI accelerators.
USA ordered Taiwan Semiconductor Manufacturing Co (TSMC) to suspend shipments of advanced chips to Chinese customers, chips that are frequently used in artificial intelligence (AI) applications, starting this Monday.
This directive comes from Department of Commercewhich imposed restrictions on the export of sophisticated chips with designs of 7 nanometers or more advanced, destined for China. These components are critical for graphics processing units (GPUs) and AI accelerators.
The new measure comes after a incident reported last monthin which TSMC informed the Commerce Department that one of its chips had been identified in a Huawei AI processor. The discovery was made by the technology research firm Tech Insights, which when disassembling the product found the TSMC chip, suggesting a possible violation of export controls.
What were the reasons for the restriction on China?
Huawei, which is at the center of American action, appears in a restricted trade list. Suppliers must obtain licenses to ship any goods or technology to Huawei, and licenses that help improve the Chinese company’s AI capabilities are likely to be rejected.
After receiving the letter from the Department of Commerce, TSMC notified its affected customers about the suspension of chip shipments starting Monday. The restriction goes beyond a single company, allowing the US to evaluate whether other companies could also be redirecting chips to Huawei for their AI processors.
The Taiwanese chipmaker expressed its commitment to complying with domestic and international regulations, including applicable export controls. The US Department of Commerce declined to comment on the matter, Reuters reported. The action taken by the US government bypasses the extensive rule-writing process, allowing for the rapid imposition of new licensing requirements on specific companies.
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Other companies had already limited their ability to export to China
The decision raised concerns among Republican and Democratic lawmakers about the adequacy of export controls to China and the Commerce Department’s enforcement of these controls. In the last year, similar restrictions have been imposed on Nvidia (NASDAQ:NVDA) and AMD (NASDAQ:AMD), limiting their ability to export high-end AI chips to China. Equipment makers such as Lam Research (NASDAQ:LRCX), Applied Materials (NASDAQ:AMAT) and KLA also faced restrictions on providing tools for advanced chip manufacturing in China.
The US lagged behind in updating its technology export rules to China. Although new rules have been drawn up on the export of chip manufacturing equipment and plans to add numerous Chinese entities to the restricted list, these rules have not yet been officially published.
Source: Ambito
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