U.S. imposes new export restrictions on TSMC’s AI chips

• The U.S. has ordered TSMC to halt shipments of advanced chips used in AI applications to China, citing export restrictions.
• The move follows a previous report of TSMC’s chip found in a Huawei AI processor, escalating tensions over technology exports.

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What happened

The U.S. has ordered TSMC to halt shipments of advanced chips used in AI to Chinese customers. The Department of Commerce imposed export restrictions on chips with 7 nm or more advanced designs, which power AI accelerators and GPUs. This follows TSMC’s report that one of its chips was found in a Huawei AI processor. The move aims to limit China’s access to critical semiconductor technologies, particularly those used in AI. As U.S.-China tensions rise, this action could disrupt supply chains and the global semiconductor market. Experts like Daniel Ives of Wedbush Securities highlight the geopolitical implications as the U.S. seeks to maintain its AI lead while curbing China’s technological progress.

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Why it is important

This is a key moment in the U.S.-China tech rivalry, with the U.S. aiming to limit China’s access to advanced semiconductors. Halting AI chip shipments raises concerns over national security and tech dominance, particularly in AI and machine learning.

The move follows TSMC’s finding of its chip in a Huawei AI processor, sparking worries over China’s use of foreign chips in sensitive tech. The restrictions will impact TSMC and disrupt global supply chains, especially in AI and tech. This decision is part of growing U.S.-China tech trade tensions, making it important for investors and companies to stay alert.