TSMC will restrict 16nm chips sales to China

TSMC is tightening control over semiconductor supplies to China, extending restrictions to products manufactured using the 16nm process technology. Previously, the restrictions only applied to advanced technologies – 7nm and thinner, but now the company is informing customers about new rules, according to which supplies are possible only if the final packaging of chips is carried out through approved OSAT companies. This should increase transparency in the supply chain.

One of the factors that influenced TSMC’s decision may be tough trade measures from the United States, especially in the context of the policies of the new President Donald Trump. The manufacturer’s additional caution is associated with recent cases when TSMC crystals ordered through intermediaries were found in Chinese Huawei chips.

Chinese companies have already begun to adapt to the new conditions, transferring packaging orders to approved OSAT companies. However, for TSMC, this segment of the business brings in less than 10% of revenue, so the potential losses are not critical. At the same time, China has its own capacity to produce 16-nm and 18-nm chips, which allows it to produce products for foreign markets, including automakers from the US and Europe.