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US Calls On Taiwan To Stop Supplying AI Chips To China

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US Calls On Taiwan To Stop Supplying AI Chips To China

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Written by Ahmed Adel, Cairo-based geopolitics and political economy researcher

Washington has officially demanded that Taiwan Semiconductor Manufacturing Co (TSMC), one of the world’s largest semiconductor manufacturing companies, stop supplying China with chips used in Artificial Intelligence (AI), Reuters reported on November 10. However, Washington’s pressure on China’s semiconductor industry also includes Taiwan once Donald Trump comes to power next year.

TSMC is one of the largest chip producers and cooperates with several technology companies, such as Nvidia and AMD, and specialises in integrated circuit, also known as a microchip, a small device made up of several interconnected electronic components that are etched onto a small piece of semiconductor material.

Taiwan produces about 90% of the world’s most advanced semiconductors, mostly by TSMC, and ensuring these chips do not reach China is a priority for Washington, an effort that will only intensify when Trump becomes president.

“The US ordered Taiwan Semiconductor Manufacturing Co to halt shipments of advanced chips to Chinese customers that are often used in artificial intelligence applications,” Reuters reported, citing sources familiar with the subject.

The US Commerce Department restrictions outlined in the letter affect shipments to China of advanced 7-nanometre and higher-end chips for graphics processing units (GPUs) and AI accelerators. The article noted that weeks ago TSMC itself informed the Commerce Department that it had found its chip in an AI processor from the US-sanctioned Chinese company Huawei.

Nikkei Asia magazine, citing sources, reported that TSMC will suspend production of AI and high-performance chips for several Chinese companies in order to comply with US export controls.

In early October 2022, US authorities banned 28 Chinese technology companies from accessing semiconductor chips manufactured with US technology worldwide. The ban applies not only to supplies from US companies, but also to any company in the world that uses US semiconductor technology, which is why TSMC is feverntly denying the allegation.

“TSMC has had regular discussions with the government on export control issues and has made it clear that it will comply with domestic and international regulations,” Taiwan’s economy ministry said in a statement to Reuters, referring specific questions to TSMC.

A spokesperson for TSMC also declined to comment beyond saying it was a “law-abiding company…committed to complying with all applicable rules and regulations, including applicable export controls.”

The Commerce Department communication – known as an “is informed” letter – allows the US to bypass lengthy rule-writing processes to quickly impose new licensing requirements on specific companies.

Despite the imposition of sanctions and restrictions, China’s chipmaking capabilities have not been dented. It is recalled that in July 2023, representatives from more than 600 Chinese semiconductor equipment manufacturing companies joined forces at the annual China Semiconductor Equipment Conference to seek self-sufficiency for the country and overcome US sanctions once and for all.

Beijing continues to support the growth of the technology sector, transforming Washington’s attempts to contain Chinese industries into an opportunity for the national market and self-sufficiency. Faced with this scenario, Chinese companies decided to join forces to work together, not only to continue advancing, but also to put an end to the American dominance in the technology market.

Washington sees Beijing as its main competitor and has repeatedly stated its intention to contain the Asian giant. In response, China’s Ministry of Commerce announced on September 15 that antimony, a material used in semiconductors, military explosives and other weaponry would be restricted from exportation. Last year, the ministry imposed export controls on two other chemical elements, gallium and germanium, also needed to make chips.

Although Washington and Beijing are locked in “chip wars,” it does not mean that US support for Taiwan’s dominance in the industry is a given.

Last year, Trump accused Taiwan of taking the US’s business away and questioned whether US support for Taiwan would continue if he became president again.

“Taiwan should pay us for defence,” Trump said, adding: “You know, we’re no different than an insurance company. Taiwan doesn’t give us anything. [Taiwan] did take about 100% of our chip business. We should have never let that happen.”

In response to Trump’s comments Taiwan officials emphasised strong bilateral ties and broad international cooperation in the chip sector but stressed that they intended to keep its Research and Development on the island and maintain industry supremacy.

The exchange between Trump and Taiwan was made before the billionaire was elected, meaning it is inevitable that Washington will not only intensify pressure on China’s semiconductor industry, but also on Taiwan once he enters the Oval Office on January 20. Whether Trump will be able to recover and challenge Taiwan’s dominance in the field remains to be seen, but there is great skeptism since he is yet to offer any viable plan on how to achieve this.

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D e n _ S n o _ W

americans can’t wait to start a hot war with china. trump is quite famous for his anti-chinese rhetoric. they even don’t try to hide the fact that they are going for that. as the wars in ukraine and the middle east were not enough.

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Anonymous

trump dear boy us a realist not a fantasist like the public who make the most noise. he understands that money talks and the first fact about reality is that war is the most profitable business on earth ,followed by crime. that’s the starting point of playing thd game. if you have any realistic expectations .

MacZ

for all its numerous (and deep) faults, trump is not a bloody psychopath. otherwise he would have implemented project ukraine in 2016, replacing hillary who should have lead it. the us establishment tried to get rid of him for this very reason. he understands, as a businessman, that war is wasteful, and that why he tried to extirp the us from afghanistan and from syria. so we’ll so how this goes, but my bet is that the bloody psychopaths will be disappointed.

MacZ

a recent study found it was cheaper to rent h100 time in china than is the us. and the h100 is not authorized to be sold to chinese clients. when there is a market, there is way. also a large part of these ai chips are used for large langage models that, imho, are quite dubious as their ultimate commercial viability.

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Annon

you don’t know anything is it. ai chips are subject of military race between superpowers but you are as dumb that you don’t have clue what you are talking about. these chips will be used for strikes with nuclear weapons. companies related to ai have already trillion market cap and are leaders of world economy.

MacZ

right now ai is a buzzword that is thrown around. we are in a situation like in the late 90s with the web. lots of companies are investing a lot of money in ai, hoping some of it will stick to something valuable. ai is already used in lots of things for sure. but most of these uses do not require a lot of gpus. what require 10s of thousands of gpus are large language models (llm) that have quite annoying drawbacks (they’re unreliable) and as such i question their commercial viability.

Last edited 7 days ago by MacZ
MacZ

a lot of money has been invested in ai. but due to the statistical nature of the algorithms used in ai, it may be that, like in the late 90s, a lot of hopes put into it will turn illusional. or maybe we will have military ais that tell that for vanquishing the chinese, you have to nuke california. who knows ?

Anonymous

it’s absolute rubbish like y2k was .absolute straight out fraud lies ” and in the end times the whole world shall be deceived ” just look at the incompetence oc auto correct theg can’t even get that to work. eg theg .really smart aren’t they ?

Anonymous

it’s all absolute absolute fraud. all of it everything or as qe2 diplomatically stated ” nothing is what it seems “

Last edited 7 days ago by Anonymous
Anonymous

look the chinese were entrapped into communism by mao so that they could be used by western oligarchs as slave labour for western wealth creation by maximising the gap between the rich and poor .to weaken the middle class .so as to facilitate 1984.

MacZ

the chinese watched what happened to the ussr and said that they were not going to have any of it. that’s why they switched to capitalism really, with a single party system. and they succeeded to lift 1 billion of their people from poverty. and now the west is desperately trying to prevent them from overpowering them, but failling. there is in fact much more capitalist competition in china than in the us.

Last edited 7 days ago by MacZ
Anonymous

the chinese had nothing to do with it .drugs are a huge racket cash cow laundry in china with the world s biggest population .thd english set it up with their opium war .wake up .they went to war to set up.drug trafficking in china!!!!! wtf is wrong with you people?

hasbarats

fentanyl into the ussa is reverse opium wars. china knows how to fuck its enemies up really good

Anonymous

look after epstein got exposed as an attack really on the windsor’s, compromising then and their stability as being only allowed to rerain power ” at the sufferance of the people ” .then it was perfectly clear and i said it at the time, that now they will need to provide huge civer stories to bury the whole scandal. it’s basic policy .

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Anonymous

i actually wrote at the time that i’d bet they follow up with a major health scare and them a war .that’s exactly what i said .

hasbarats

hahahahahah….good luck with that. taiwan is china

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