TSMC is following US demands and restricting Chinese chipmakers’ access to its modern factories. Companies that want to make high-end AI chips will have to look elsewhere.

Taiwan’s TSMC has told Chinese chip designers that it is unwilling to bake their advanced AI chips in its factories. TSMC is following American sanctions. The USA imposes far-reaching restrictions on the production of Chinese microchips and can also use its influence abroad. This is made possible by rules under which companies that use American devices, such as TSMC, are also subject to the restrictions.

Strict rules

Chinese companies that want to continue using TSMC’s services will have to go through an approval process, according to the Financial Times. Details are not known, but it seems inevitable that the Trump-controlled American government will have to give its consent.

TSMC expects the new measures to impose even stricter rules. The move is painful for Chinese manufacturers as they have few alternatives. Because in order to produce the most advanced chips, they require state-of-the-art production facilities. TSMC currently has the most modern factories in the world. There are no factories in China that provide comparable performance.

Currently the restrictions apply to AI chips. It is unclear to what extent other chip types will also be restricted.