US ordered TSMC to halt shipments to China of chips used in AI applications

By Karen Freifeld and Fanny Potkin

The U.S. ordered Taiwan Semiconductor Manufacturing Co 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, as Reuters reported last month. 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,