The US has ordered TSMC to halt shipments to advanced AI chips to China from Monday: Source

Published On Nov 11, 2024, 3:22 AM

The U.S. has ordered Taiwan Semiconductor Manufacturing Company (TSMC) to stop shipments of advanced chips to China, effective immediately. This move targets sophisticated chips used in AI applications, following a revelation that a TSMC chip was found in a Huawei AI processor, which is under U.S. export controls. The U.S. Department of Commerce notified TSMC of the export restrictions, allowing it to bypass lengthy processes to impose new licensing requirements quickly. This restriction impacts TSMC’s dealings with Chinese companies, particularly in the high-tech sector, amid concerns from U.S. lawmakers about export control enforcement on China.

Stock Forecasts

The restrictions are likely to reduce revenue from Chinese clients for TSMC, which could lead to a negative outlook for the stock in the short term. However, given TSMC's leadership in semiconductor manufacturing and potential increases in demand from other markets, the long-term prospects may stabilize once TSMC adjusts to new regulations.

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