The US Department of Commerce ordered Taiwan Semiconductor Manufacturing Company (TSMC) to stop supplying advanced chips used to support AI workloads to Chinese companies, Reuters reported.

The restrictions reportedly cover 7nm and more advanced components used in AI accelerators and GPUs.

In late October, the chipmaker was forced to stop shipping chips made for a China-based customer after discovering the components ended up on a Huawei processor.

US sanctions bar Huawei from importing advanced 5G and AI chips.

Reuters stated the new controls impact more Chinese companies and will enable the US to determine if other customers are diverting chips for Huawei’s AI processor.

In October 2023, the DoC released new curbs on the sale of AI chips to China to close loopholes that emerged after chip export restrictions were put in place in 2022.

Last month, TSMC raised its revenue growth forecast for the full year to 30 per cent after recording a 54.2 per cent year-on-year increase in net profit in Q3. It reported October sales rose 29.2 per cent to TWD314.2 billion ($9.7 billion).