MENA Newswire News Desk: The United States government has reportedly ordered Taiwan Semiconductor Manufacturing Company (TSMC) to cease shipments of advanced artificial intelligence (AI) processors to Chinese entities, according to a report by the South China Morning Post. This directive, issued by the U.S. Department of Commerce, specifically restricts the export of AI processors and high-performance graphics processing units (GPUs) manufactured with 7-nanometer (nm) or smaller fabrication technologies, critical for the latest AI applications.
The move follows a recent incident involving Huawei Technologies Co., which allegedly found a way to bypass existing U.S. export restrictions. The Department of Commerce’s action was prompted by the discovery of a TSMC-manufactured chiplet embedded in an AI processor developed by Huawei’s semiconductor subsidiary, HiSilicon. Reportedly, a research firm, TechInsights, disassembled a Huawei server equipped with this processor, uncovering the presence of TSMC’s technology within it.
As Huawei remains on a U.S. trade restriction list, companies supplying components with over 25% American technology must secure an export license to sell to Huawei, a requirement the U.S. claims was breached in this case. In response, TSMC alerted the U.S. Commerce Department about the appearance of its chiplet within the Huawei processor, despite export restrictions.
According to sources, Huawei utilized an intermediary to place the order with TSMC, circumventing direct dealings that would have triggered compliance checks with U.S. trade policies. This incident appears to have heightened U.S. scrutiny of technology transfers involving advanced AI and GPU technologies.
The recent Commerce Department directive primarily affects AI and high-performance computing applications and does not broadly restrict all technology sales to Chinese companies. Chips destined for consumer electronics and automotive products remain unaffected, allowing TSMC to maintain operations in those sectors.
However, the U.S. government has stated it will monitor additional Chinese companies, such as Alibaba and Baidu, to ensure compliance, despite their distinct business focuses and lack of direct association with Huawei. TSMC has not disclosed further details about the order but confirmed that it fully adheres to legal requirements, including U.S. export control regulations.
The company reiterated its commitment to regulatory compliance, though this adherence may impact revenue in the competitive semiconductor sector. The U.S. Department of Commerce has refrained from additional comment on the decision or the possibility of further restrictions. This directive could influence industry practices regarding export compliance and supply chains in the semiconductor sector.
Amid rising U.S.-China trade tensions over advanced technology, semiconductor manufacturers like TSMC find themselves increasingly affected by regulatory policies that control access to key components for AI developments in China. These restrictions may prompt further efforts by Chinese technology firms to advance domestic semiconductor capabilities, potentially reshaping the global semiconductor market over time.