TSMC to stop advanced AI chip production for Chinese firms: Report

Huawei-TSMC chip war is now turning to a new chapter where the latter is about to stop AI chipset production for Chinese firms. Following the recent investigation, the Taiwanese semiconductor company may break off every chip deal with China.

Financial Times reports that TSMC will suspend the AI chip manufacturing for Chinese firms, next week. The chipmaker recently notified its Chinese customers about its new decision, which will come into action on Monday (November 11).

A few people related to this matter said if TSMC plans to begin the chip supply in China in future, ‘it would be subject to an approval process likely to involve US’.

TSMC is taking this step to comply with the U.S. restrictions on China’s access to advanced chips. This move will punch Alibaba, Baidu, and other Chinese firms that used to rely on Taiwanese AI chips for their AI clouds and more products.

U.S. authorities have already prohibited Nvidia from selling top-notch AI chips in China. It even tightened the export control system, restricting worldwide chipmakers from supplying advanced tools or tech to China.

Now TSMC is ready to take a new step in this scenario, creating problems for Chinese companies. The plan came out after a TSMC-made chip part appeared in a Huawei AI processor. It seems TSMC is facing pressure from the US over chip dealings in China.

Being good in front of Trump?

Some of the people said that TSMC played this move to remain good in the eyes of Donald Trump – the next president of the US. This year, Trump has blamed the Taiwanese firm for stealing the US chip industry.

One of the TSMC-related people said that the new move is not to flaunt the company in front of Donald Trump but to adhere to US trade rules and regulations.

“TSMC move is not a show for Trump but definitely designed to underscore that we are the good guys and not acting against US interests.”

Will this move affect Huawei?

Huawei has already said that it stopped taking aid from TSMC since 2020. The company has teamed up with SMIC for its chip manufacturing. It is also making efforts to become self-reliant in the AI processor field.

Perhaps, TSMC’s current move will not affect Huawei. Instead, it may attract more customers to the company’s AI chips than before.

TSMC to stop advanced AI chip production for Chinese firms (Image Credits: Huawei)

(source)