Taiwan Semiconductor Manufacturing Company (TSMC) is halting artificial intelligence chip production for its Chinese customers.
TSMC has reportedly told Chinese companies it will no longer build AI chips at advanced process nodes of seven nanometres or smaller, starting tomorrow.
The company found last month that its advanced chips had been used in Huawei’s processors without TSMC’s knowledge. Huawei has been sanctioned by the United States.
“TSMC has had regular discussions with the government on export control issues and has made it clear that it will comply with domestic and international regulations,” a spokesperson for Taiwan’s Economic Affairs Ministry said.
Chinese technology firms like Baidu and Horizon Robotics have been among TSMC’s customers in the country. In 2019, 20% of TSMC’s revenue stemmed from China, though just 12% came from China last year.
The move comes after the United States announced its limits on American investment in Chinese advanced technology last month, citing national security risks from China’s continued expansion into AI and semiconductors.
The US has also banned Nvidia from selling its AI chips in China.
TSMC’s future chip production for Chinese companies will likely need American approval, and the company is reviewing orders to ensure its chips are not given to sanctioned organisations.
TSMC’s (NYSE: TSM) share price closed at US$201.20, flat from the previous day’s $201.19. Its market cap is $1.04 trillion.