Taiwan Semiconductor Manufacturing Company Stops AI-Powered GPU Chip Supplies to China
TSMC’s New Restrictions on Chinese Chip Designers: A New Dynamic Unfolds
In a move to comply with US sanctions, Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s top chip foundry, has imposed new restrictions on Chinese chip designers. As of January 31st, 2023, fabless Chinese chip designers can no longer order TSMC to build chips using a process node of 16nm and lower without utilizing a third-party US government-approved packaging house. But why is this sudden change in policy, and what does it mean for the tech industry?
The Backstory
In November 2022, TSMC stopped shipping AI chips to Chinese customers after a chip manufactured by the company was discovered inside an AI processor made by Huawei. This move was in line with US sanctions, which prohibit the export of certain semiconductors to China. Fast forward to January 2023, and we see that TSMC has added even more restrictions to its policy.
The New Restrictions
The latest restrictions are designed to prevent powerful silicon components used for AI training from falling into Chinese hands. In addition to the existing embargo on chips with over 30 billion transistors produced using the 16nm process node or lower, TSMC has introduced new rules. Now, Chinese companies need to use US government-whitelisted OSATs (Outsourced Semiconductor Assembly and Test) to receive chips produced by TSMC. This means that Chinese firms turning to TSMC for chip production will need to obtain a license from the US Department of Commerce.
Who’s Affected?
While the restrictions may seem harsh, companies like Apple, AMD, Intel, MediaTek, and others are expected to receive licenses even for chips with more than 30 billion transistors. Mainstream GPUs previously sold to Chinese firms without restrictions will now require a license to be shipped to China. It’s interesting to note that TSMC’s restrictions are even tighter than those imposed by the US government.
A Scandal Unfolds
The DeepSeek iOS app, a Chinese AI-powered search engine, recently made headlines after it was discovered that the company had illegally obtained Nvidia H800 GPUs, which are capable of 80 billion transistors, using the 4nm process node. The FBI and White House are investigating how DeepSeek obtained these chips, with one theory suggesting an intermediary in Singapore was involved. Nvidia has stated that it didn’t believe DeepSeek broke the law, but emphasized that its partners must act within the law.
What’s Next?
As the tech industry continues to evolve, we can expect to see more developments in this complex web of restrictions and sanctions. One thing is clear: TSMC’s new restrictions have sent shockwaves through the industry, and it will be exciting to see how companies adapt to this new landscape.
Image Credit: The DeepSeek iOS app
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