U.S. Requests TSMC to Stop Chip Shipments to China Amid Huawei Controversy

Recent reports indicate that the U.S. government has approached Nvidia and its key partner, Taiwan Semiconductor Manufacturing Co (TSMC), with a directive to cease shipments of advanced chips intended for AI applications to clients in China.

What Happened: According to sources familiar with the matter, the U.S. Department of Commerce delivered a letter to TSMC requesting that shipments of specific chips, particularly those built on 7-nanometer technology or more advanced, be halted starting Monday. These chips are crucial for powering AI accelerators and graphics processing units.

The situation escalated after TSMC notified the Department of Commerce that one of its chips had been identified in a processor developed by Huawei, a company currently restricted from trade with U.S. entities.

Huawei is included in the U.S. restricted trade list, which requires any supplier to obtain licenses prior to shipping any goods or technologies to the company.

Why It Matters: The investigation into how TSMC's chip ended up in the Huawei Ascend 910B “multi-chiplet” processor remains unclear. However, TSMC has informed its Chinese clients of the suspension of shipments effective from Monday, according to the report.

It is noteworthy that similar actions were taken previously, as the U.S. Department of Commerce sent communications to Nvidia and AMD in 2022, restricting their ability to export AI chips to Chinese clients. These communications later evolved into official regulations.

The ongoing tensions surrounding technology exports and company regulations highlight the complexities in the global tech supply chain, particularly concerning national security and competitive advantage.

US, TSMC, Huawei