THE TECHNICAL WAR CONTINUES:
The suspension of TSMC AI chips and GPUs would deal a major blow to Chinese chip designers and affect their competitive advantage.

• By Lisa Wang / Journalist

Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, is expected to suspend the supply of artificial intelligence (AI) chips and graphics processing units (GPUs) made on processing technologies of 7 nanometers or more advanced starting next week to comply with US Department of Commerce rules.

TSMC sent emails to its Chinese AI customers, informing them of the suspension starting Monday, Chinese online media Ijiwei.com (愛集微) reported yesterday.

The US Department of Commerce has not yet officially unveiled further measures against China regarding semiconductors.

Photo: Chiang Ying-ying, AP

“TSMC does not comment on market rumors. TSMC is a law-abiding company and we are committed to complying with all applicable rules and regulations, including applicable export controls,” TSMC said in an email yesterday.

The chipmaker’s move comes as it faces growing pressure from the U.S. department to comply with its semiconductor restrictions, underscoring the escalating Sino-U.S. tech war, the report said. .

Last week, TSMC stopped shipments of 7-nanometer chips to China-based chip designer Sophgo Technologies Ltd (算能科技) after a chip it made was found on a Huawei AI chip Technologies Co (華為).

Suspending TSMC chips would deal a major blow to Chinese AI and GPU designers and hurt their chip performance and competitive advantage, the report said.

TSMC could gain greater business opportunities from the United States by following Commerce Department rules, he adds.

Taiwanese microchip companies are being warned to prepare for tougher regulations following US President-elect Donald Trump’s election victory.

Last month, Trump accused Taiwan of “stealing” the US chip industry and threatened to impose tariffs on chips from Taiwan.

As TSMC is a major supplier of advanced chips to Nvidia Corp, Advanced Micro Devices Inc and Intel Corp, any hike in tariffs could inflate electronics prices and increase inflation in the United States. It remains to be seen whether Trump would impose sweeping or selective tariffs, Macronix International Co. (旺宏), Chairman Miin Wu (吳敏求), said Thursday.

Macronix is ​​the world’s largest supplier of NOR flash memory chips.

To safeguard US progress in AI technology, the US is likely to require TSMC to produce all cutting-edge chips in the US, including the most advanced chips, given growing tensions between Taiwan and China, Wu said.

Without adequate bargaining power, TSMC and the government may find it difficult to refuse the request, Wu added.

TSMC will ramp up production of 4-nanometer chips at its first U.S. factory in Arizona next month. The chipmaker plans to build two more advanced manufacturing plants in Arizona for the production of 2 nanometer and larger chips in the United States.