TSMC to suspend production of AI chips for China

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With TSMC announcing that it is about to start manufacturing 2nm GAA-based wafers towards the end of 2025, there are now reports that the company has told Chinese chip design companies that it is suspending production of their most advanced AI chips.

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According to media reports TSMC, due most likely to coming under pressure from the US, has informed Chinese customers that it will no longer manufacture or supply AI chips at advanced process nodes of 7 nanometres or smaller.

The US is looking to restrict the shipment of advanced GPU chips - which enable AI - to China and it’s likely that in the future supplies of advanced AI chips by TSMC to any Chinese customers will be subject to an approval process that will probably involve the US administration.

The outgoing Bush administration has been determined to slow the development of Chinese artificial intelligence capabilities, and recently fined US-based GlobalFoundries for shipping chips without authorisation to an affiliate of blacklisted Chinese chipmaker SMIC.

The move to restrict exports to China comes as the US Department of Commerce is carrying out an investigation as to how chips from TSMC ended up in a product made by China's heavily sanctioned Huawei.