TSMC to stop supplying advanced AI processors

After accidentally producing an AI chip for Huawei through a middleman, TSMC has decided to stop supplying advanced AI processors to all its Chinese customers from Monday, November 11, the report said. Financial Times, quoting Ijiwei.com, which in turn mentioned emails sent by the foundry to its customers. This change affects advanced process technologies (such as 7nm and below) and will have a significant impact on Chinese AI processor developers. However, this does not mean that TSMC will completely stop serving these customers. 🌐

The new restriction is limited to processors and AI GPUs manufactured at 7nm nodes or below. Smartphone processors, chips for mobile devices, and applications Automotive and other devices that cannot be used for military or dual-use purposes will not be affected, according to the report. Ijiwei. Sources close to the situation have reportedly mentioned that future supplies of advanced AI processors to entities based in China will require some sort of approval process, likely involving specialists from the US Department of Commerce. 🏛️

It is unknown what plans TSMC has with the wafers containing advanced processors that are already in production, as well as those that have already been processed and are in their inventory. They may be shipped to customers if they obtain the proper export licenses. 📦

TSMC currently makes AI processors for giants like Alibaba and Baidu (specifically mentioned in the report). FT), which produce their own processors (such as Kunlun and Kunlun II) at TSMC. TSMC also manufactures hardware for several AI processor designers, such as Horizon Robotics and Black Sesame International Holding, which design processors for applications such as autonomous vehicles, according to the Financial TimesFor these companies, the new restriction would likely be a major setback, as they are highly dependent on processors manufactured by TSMC. 🚗

The US has already banned American companies including AMD, Intel and Nvidia from selling their most advanced AI and HPC processors to Chinese entities and has also put in place extensive export controls aimed at stopping the development and production of such processors, prohibiting the use of technology United States

Despite this, chip developers (including Nvidia, based in China and the US) have modified their chip designs to comply with US export rules or have obtained an export license from the US Department of Commerce. SMIC managed to legally import advanced wafer fabrication tools from American companies into its legacy production facilities, only to use them in advanced factories to manufacture sophisticated chips for Huawei. As for Huawei, it used intermediaries to order chips from TSMC. 🔄

In fact, the foundry's decision follows a U.S. Commerce Department investigation into how sophisticated chips produced by TSMC for a Chinese client ended up in a Huawei AI device, despite Huawei being under multiple U.S. sanctions. TSMC's new restrictions reflect both a desire to strengthen its own controls internally as well as preparing for expected limitations on chip exports to China before President Biden's term ends. 🛡️

Sources familiar with TSMC's plans told the Financial Times The new restrictions are unlikely to significantly affect the company's revenue. In an official statement, TSMC did not fully confirm that it had sent the aforementioned email to its Chinese customers, but emphasized its commitment to being a "law-abiding company," dedicated to adhering to all relevant rules and regulations, including export control requirements.