TSMC has stopped supplying modern chips to China

TSMC, the largest contract manufacturer of semiconductors, has announced that it will stop supplying Chinese companies with chips made using 7nm and more advanced processes from November 11. The move is aimed at complying with U.S. export restrictions that are being tightened amid the escalating chip war between the U.S. and China.

According to sources, the restriction will not affect orders from Chinese companies for other sectors, such as mobile communications, and the overall impact on TSMC’s profits will be minimal. Earlier, the company informed the US authorities about attempts by one of its Chinese customers, likely chip designer Sophgo, to circumvent the bans by placing orders for a chip similar to the Huawei Ascend 910B GPU. As a result, the supply to this customer has been suspended. The US Department of Commerce has demanded that TSMC cease such shipments without the appropriate licenses, underscoring the difficult position of the manufacturer in the global supply chain.

TSMC Senior Vice President Cliff Howe said that by the end of 2024, semiconductor production in Taiwan will grow by 22% to reach NT$5.3 trillion (US$164.2 billion). Growth is largely due to economic development and technological progress in the field of artificial intelligence.

Taiwan continues to be a world leader in the production of semiconductors, which are needed in many industries, including electronics, power systems and aerospace. TSMC controls more than half of the global chip manufacturing market, with giants such as Apple and NVIDIA among its major customers.