Taiwan Semiconductor Manufacturing Co (TSMC) has notified Chinese chip design companies that it is suspending production of its most advanced AI chips from Monday, the Financial Times reported, citing three people familiar with the matter.

TSMC, the world’s largest chip maker, has told Chinese customers it will no longer make AI chips at advanced process nodes of 7 nanometers or smaller, the FT said on Friday.

The US has imposed a series of measures aimed at restricting the supply of advanced GPU chips – which enable artificial intelligence – to China to prevent its AI capabilities, which Washington fears could be used to develop biological weapons and launch large scale cyber attacks.

Earlier this month, the US fined New York-based GlobalFoundries $500,000 for supplying chips without authorization to a subsidiary of blacklisted Chinese chipmaker SMIC.

Any future shipments of advanced AI chips by TSMC to Chinese customers would be subject to an approval process that could involve Washington, according to the FT report.

“TSMC does not comment on market rumors. TSMC is a law-abiding company and we are committed to complying with all applicable rules and regulations, including applicable export controls,” the company said.

The US Commerce Department did not immediately respond to a Reuters request for comment.

The move to restrict exports to China comes as the US Commerce Department investigates how a chip made by the Taiwanese chipmaker ended up in a product made by China’s heavily sanctioned Huawei.

© Thomson Reuters 2024