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Taiwan Semiconductor Manufacturing Company (TSM-0.21%) is following U.S. efforts to curb China’s artificial intelligence ambitions, reportedly telling chip design firms in the country it will stop producing their most advanced AI chips.
The Taiwanese chipmaker told its Chinese customers it is no longer manufacturing AI chips with the advanced 7 nanometer process or smaller starting on Monday, the Financial Times reported, citing unnamed people familiar with the matter. If TSMC does produce the advanced chips for Chinese firms in the future, the U.S. government would likely be involved in an approval process, the people said. Chinese media site ijiwei first reported the news, according to the Financial Times.
While TSMC is targeting advanced AI chips, people told the Financial Times they are unsure if the rules will affect other chips that China’s leading chip firms are designing. The rules will reportedly have a minimal impact on TSMC’s revenue.
TSMC said it is a “law-abiding company and we are committed to complying with all applicable rules and regulations, including applicable export controls,” in a statement shared with Quartz, but declined to comment further.
The chipmaker reportedly made the decision to cut off Chinese firms to improve internal controls, and in anticipation of updated U.S. export controls on chips sold to China by the outgoing Biden administration. TSMC is also reportedly worried about being targeted by the incoming Trump administration, which has accused Taiwan of stealing chip manufacturing from the U.S.
“We want to start mitigating before there are solid, structured regulations,” a person told the Financial Times. Another person said TSMC’s decision is “not a show for Trump but definitely designed to underscore that we are the good guys and not acting against US interests.”
TSMC’s new rules come as the chipmaker faces an investigation into how its advanced chip technology ended up in a cutting-edge AI accelerator from sanctioned Chinese tech giant Huawei. Canadian research firm TechInsights took apart Huawei’s chip and reportedly found the TSMC-made tech.
Meanwhile, TSMC’s production yields — or the number of functional chips it can produce per manufacturing process — at its Phoenix, Arizona site are about four percentage points higher than those of comparable fabrication sites in Taiwan, Bloomberg reported. It has also reportedly started making its first chips for Apple at the Phoenix-based fab.
This story has been updated to include a statement from TSMC.
