TSMC suspends production of advanced AI chips for Chinese firms
What's the story
Taiwan Semiconductor Manufacturing Company (TSMC) has stopped the production of cutting-edge artificial intelligence (AI) chips for Chinese firms, according to Financial Times. The move particularly impacts the models that are 7 nanometers and smaller. Any order from a Chinese company for products in this category will now have to go through an approval process, likely involving the US government.
Policy shift
TSMC's policy change follows Huawei's unauthorized use of chips
The policy change by TSMC could also be a reaction to its recent discovery that Huawei had used its chips in AI accelerators without prior consent. The information was brought to light by Canadian research firm TechInsights, which found TSMC-manufactured products in Huawei's hardware. The act violated the trade sanctions imposed by the US Commerce Department against Huawei in 2020, prohibiting it from acquiring chips made by foreign companies.
Investigation underway
TSMC denies ties with Huawei, halts chip sales
Following TechInsights's revelation, TSMC reported the findings to the US Commerce Department, which has launched an investigation into the matter. The company has denied any business relationship with Huawei and stopped selling its chips to a client suspected of illegally supplying them to Huawei. According to sources cited by Financial Times, TSMC's decision is aimed at showing that it is "not acting against US interests."
Potential repercussions
Impact on Chinese firms' AI initiatives
TSMC's new policy could have a major impact on the AI efforts of its Chinese clients. For instance, Baidu had plans to build hardware for its AI business with a series of chips produced by TSMC. Now, these plans may have to be altered or postponed in light of the sudden shift in TSMC's production policy. This highlights the complex interdependencies of global tech supply chains and their vulnerability to geopolitical tensions.