TSMC Limits Chip Supplies to China Amidst Geopolitical Tensions

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by Giorgi Kostiuk

2 years ago

Taiwan Semiconductor Manufacturing Company (TSMC) has announced the suspension of its advanced AI chip production for China, amid geopolitical tensions between the West and the East.

TSMC to Implement Tight Controls

According to the Financial Times, TSMC notified Chinese companies of its intention to halt production of AI chips at advanced process nodes of 7 nanometers or smaller starting this Monday. Shipments will cease from November 11, affecting companies that utilize TSMC's technology for AI, smartphones, and automobile chips. Future semiconductor supplies will require US approval.

TSMC Decision to Affect Huawei and Alibaba

The restriction on TSMC chip supplies could impact Chinese tech firms such as Alibaba, Baidu, and Huawei. For instance, Baidu's Kunlun II processor is produced using TSMC's 7nm processes. However, companies that are not affected by the ban will still have access to AI chips under a licensing agreement. TSMC expects that other countries' companies will make up for the losses from reduced Chinese shipments.

The limitation on TSMC chip supplies is part of a broader US policy to control technology exports to China due to geopolitical tensions. This decision significantly impacts both Chinese and international semiconductor markets.

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