TSMC has reportedly told its Chinese clients it will discontinue supplying some of its most advanced AI chips. This comes amid U. S. efforts to limit China's access to cutting-edge technology. According to the Financial Times, the move is not expected to impact TSMC's revenue significantly. Taiwan Semiconductor Manufacturing Co. , the world's top independent semiconductor foundry, will cease making AI chips at advanced nodes of 7 nanometers or smaller for Chinese companies starting Monday, sources indicated. Previously, TSMC provided chips to prominent Chinese tech firms like Alibaba and Baidu, key players in China's drive to develop a domestic equivalent to the U. S. 's Nvidia. Future supplies to Chinese companies would need regulatory approval, potentially involving U. S. oversight. The Biden administration is anticipated to introduce new export controls on chip supplies to China soon. A source mentioned that TSMC aims to adapt before specific regulations are on the books. TSMC faces restrictions on business dealings with certain Chinese tech firms without U. S.

government approval, as part of sanctions intended to shield national security by limiting China's access to advanced technologies. This follows scrutiny of TSMC's supply chain after its chips were allegedly found in Huawei products, leading to a U. S. Commerce Department investigation. The decision to halt high-powered AI chip supplies to China is also partially driven by this scrutiny, with sources suggesting it reflects TSMC's alignment with U. S. interests rather than political gestures. Despite the tensions, TSMC reaffirmed its commitment to its U. S. investment plans, highlighting that the cessation of chip supplies was not influenced by a desire to appease incoming leadership. TSMC has neither confirmed nor denied these reports but stated its commitment to adhering to all applicable laws and export controls. The initial report of TSMC's production halt came from the Chinese media site Ijiwei.