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 AI processors and GPUs manufactured on 7nm nodes or below. Smartphone processors, chips for automotive applications, 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 not known what plans TSMC has for the wafers containing advanced processors that are already in production, as well as those that have already been processed and are in its inventory. Perhaps they will be shipped to customers if they obtain the appropriate 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 makes 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 rely heavily 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 American technology. 🇺🇸

Despite this, chip developers (including China- and US-based Nvidia) have either modified the design of their processors to meet the requirements of US export rules or 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 middlemen 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 internal controls and to prepare for expected limitations on chip exports to China before President Biden's term ends. 🛡️

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