The United States government has reportedly ordered Taiwan Semiconductor Manufacturing Company (TSMC) to stop shipping advanced artificial intelligence chips to Chinese customers starting from this Monday, November 11.
According to a source cited by Reuters, the U.S. Department of Commerce has sent a letter to TSMC imposing export restrictions on certain advanced chips being shipped to China. These chips, utilizing 7-nanometer or more advanced process designs, are used in artificial intelligence accelerators and graphics processing units (GPUs).
This so-called “inform letter” allows the Department of Commerce to bypass lengthy rule-making processes and swiftly impose controls on specific companies.
Weeks before the ban was put in place, TSMC had informed the Department of Commerce that its chips were found in the artificial intelligence processors of Chinese telecommunications giant Huawei. Tech research firm TechInsights had dissected the product and discovered TSMC chips, clearly violating export controls.
It remains unclear how these chips ended up in Huawei’s AI accelerator “Ascend 910B” released in 2022, regarded as China’s most advanced AI chip.
Huawei had been placed on a U.S. trade blacklist in 2019 for national security reasons, requiring suppliers to obtain licenses to ship any goods or technology to the company. Licenses aiding Huawei’s AI work could potentially be denied.
Last month, a source told Reuters that TSMC had suspended shipments to Chinese chip design company Sophgo because its chips were matching those on Huawei’s AI processors.
The source mentioned that TSMC had notified affected customers and would halt chip shipments starting from Monday.
On Friday, Chinese semiconductor industry media website Ijiwei reported that TSMC had informed Chinese chip design companies that shipments of 7-nanometer or below chips for artificial intelligence and GPUs would be suspended beginning November 11.
A TSMC spokesperson declined to comment, only stating that the company is a “law-abiding company… committed to complying with all applicable rules and regulations, including export controls.”
This latest crackdown is affecting more companies, as the U.S. Department of Commerce will use this opportunity to assess whether other companies have redirected artificial intelligence chips to Huawei.
This move comes at a time when both Democratic and Republican lawmakers are expressing concerns about loopholes in Chinese export controls and inadequate enforcement efforts by the U.S. Department of Commerce.
In 2022, the Department of Commerce sent inform letters to Nvidia and AMD, limiting their exports of top-tier artificial intelligence chips to China, and to chip equipment manufacturers such as Lam Research, Applied Materials, and KLA, restricting exports of advanced chip-making tools to China.
The restrictions outlined in these inform letters later became rules applicable to other companies.
The U.S. government delayed updates to its Chinese technology export rules. According to a Reuters report from July, the Biden administration drafted new export rules for chip manufacturing equipment to certain countries and planned to sanction about 120 Chinese companies, including chip manufacturers, toolmakers, and related companies.
Although the new rules were initially scheduled for release in August, a definitive release date has yet to be confirmed. The rules remain unpublished at present.