China’s AI chip ambitions crushed as US forces Samsung, TSMC to cut ties

TSMC banned AI chip supply to its Chinese clients following US orders. Now, a report suggests that Samsung is also subject to US restrictions, limiting the Foundry Division from supplying 7nm and below AI chips to Chinese firms.

The US-based Intel is also said to be complying with US regulations. Currently, only TSMC, Samsung, and Intel can provide foundry services for chips at 7nm or below. That said, China’s efforts to develop advanced AI chips will be fully blocked.

As all three major foundry players are now restricted, Alibaba’s AI chip design subsidiary, Pingtouge, could hit hard. China’s SMIC claims to have 7nm production capability, but it lacks the economic scale and efficiency to compete.

It’s worth noting that Chinese firms face setbacks in developing AI chips. The vendors will increasingly need to rely on NVIDIA and AMD for downgraded products, which meet US regulations.

The fresh US restrictions initially came to light from a notice TSMC issued last week. The chip manufacturer announced that it would suspend supply of 7nm and below technologies to all Chinese AI clients starting November 11.

Later on, the US Department of Commerce officially notified TSMC about the 7nm restrictions. Last week, TSMC highlighted that “as a law-abiding company, it is committed to complying with all applicable laws and regulations,” including export control laws.

Samsung Foundry Division also notified its Chinese clients. The company’s semiconductor decision is already in crisis. The latest US restrictions vanish the remaining growth aspect that the Foundry has been securing from its Chinese clients.

Via – TrendForce