According to three sources familiar with the situation, TSMC has informed its Chinese clients that it will cease manufacturing AI chips using advanced process nodes of 7 nanometers or smaller.
The United States has implemented a series of measures to restrict the export of advanced GPU chips, which are crucial for AI development, to China. This forms part of Washington's strategy to limit China's artificial intelligence capabilities, which it apprehends could be utilized for bioweapons development and extensive cyberattacks.
Earlier this month, the U.S. imposed a $500,000 penalty on GlobalFoundries, headquartered in New York, for shipping chips without appropriate authorization to an affiliate of the blacklisted Chinese chipmaker SMIC.
Any future shipments of advanced AI chips from TSMC to Chinese clients will likely require an approval process that involves U.S. authorities, according to the FT report.
"TSMC does not comment on market rumors. TSMC is a law-abiding company and is committed to adhering to all relevant rules and regulations, including export controls," the company stated.
The U.S. Department of Commerce has not yet responded to a request for comment from Reuters.
This decision to restrict exports to China coincides with an investigation by the U.S. Department of Commerce into how a chip manufactured by the Taiwanese company was found in a product made by Huawei, which is under heavy sanctions.