TSMC to Suspend 7nm Chip Supply to China Next Week

According to recent media reports, TSMC has officially notified all of its AI chip customers in mainland China, announcing that starting next week, November 11, it will suspend the supply of all 7nm and more advanced chips to AI and GPU clients in China.

In response, TSMC issued a statement on November 8, stating that it does not comment on market rumors. The company emphasized that as a law-abiding entity, it is committed to complying with all applicable laws and regulations, including export control laws.

Industry analysis points to the delicate position of TSMC within the global semiconductor market and the escalating tech competition between the US and China as key factors behind this decision. As a leading semiconductor manufacturer, TSMC holds a global advantage with its 7nm and smaller process technologies. However, recent events, such as the "white-glove" incident and pressure from former President Trump for TSMC to pay a "protection fee," appear to have influenced the company's strategic shift. TSMC, in cooperation with the US Department of Commerce, has reportedly put in place a stringent review system that effectively blocks advanced process capacity from reaching mainland China.

This move marks a significant blow to AI and GPU companies in China, which will now be unable to access TSMC's advanced process technologies. The lack of these technologies is expected to have a major impact on their product performance and competitiveness in the market. In the fields of AI and GPU, the level of process technology is directly tied to product performance, potentially leading to increased costs and longer time-to-market.

The decision is also likely to trigger a reshuffling of the supply chain. Chip design companies in China may be forced to seek alternative foundries, which could lead to further restructuring of the supply chain. However, China's current capacity for advanced process manufacturing remains limited, making it difficult to fully replace TSMC's capabilities in the near term.