The U.S. ordered Taiwan Semiconductor Manufacturing Co (TSM, 2330.TW)to halt shipments of advanced chips to Chinese customers that are often used in artificial intelligence applications starting Monday, according to a person familiar with the matter.
The Department of Commerce sent a letter to TSMC imposing export restrictions on certain sophisticated chips, of 7 nanometer or more advanced designs, destined for China that power AI accelerator and graphics processing units (GPU), the person said.
The U.S. order, which is being reported for the first time, comes just weeks after TSMC notified the Commerce Department that one of its chips had been found in a Huawei AI processor. Tech research firm Tech Insights had taken apart the product, revealing the TSMC chip and apparent violation of export controls.
Huawei, at the center of the U.S. action, is on a restricted trade list, which requires suppliers to obtain licenses to ship any goods or technology to the company. Any license that could aid Huawei's AI efforts would likely be denied.
TSMC suspended shipments to China-based chip designer Sophgo after its chip matched the one found on the Huawei AI processor, sources revealed last month.
News media could not determine how the chip ended up on Huawei's Ascend 910B, released in 2022, viewed as the most advanced AI chip available from a Chinese company.
The latest clampdown hits many more companies and will allow the U.S. to assess whether other companies are diverting chips to Huawei for its AI processor.
As a result of the letter, TSMC notified affected clients that it was suspending shipments of chips starting Monday, the person said.
The Commerce Department declined comment.
