US-China Tensions Boil As Taiwan's TSMC Also Joins Embargo After NVidia and AMD

Oct 24, 202211:45 UTC

Taiwan Semiconductor Manufacturing Company Ltd (NYSE: TSM) suspended the production of advanced silicon for Chinese startup Biren Technology to ensure compliance with U.S. regulations.

The decision related to the reports that Biren's products outperformed Nvidia Corp's (NASDAQ: NVDA) A100 chips, which the U.S. had banned from the Chinese market, Bloomberg reported.

Biren had concluded that its artificial intelligence chips produced by TSMC did not fall under the U.S. export restrictions because the product specs do not meet the criteria for curbs.

China considered Biren a domestic contender to compete with graphics chips from Nvidia, which has said it can no longer sell its most advanced A.I. products in China.

Biren, backed by IDG Capital and Walden International, sought new funds earlier this year at a valuation of $2.7 billion.

Biren designed its flagship BR100 and BR104 processors similar to the graphics chips Nvidia and Advanced Micro Devices Inc (NASDAQ: AMD) have adapted to A.I. purposes.

Rising Taiwan-China and U.S.-China tensions have brought "more serious" challenges for the semiconductor industry, TSMC Chair Mark Liu said at the Taiwan Semiconductor Industry Association's annual convention.

With sagging demand as red-hot inflation squeezed spending, Taiwan faced a stricter situation sandwiched between its largest export market China and its main international backer and arms supplier, the U.S.

TSMC, which makes most of its chips in Taiwan, cut its annual investment budget by at least 10% for 2022 and struck a more cautious note than usual on upcoming demand.

Chinese chipmaker Yangtze Memory Technologies Corp has asked American employees in core tech positions to leave as the U.S. embargo kicked in, Financial Times reported. Several US.S citizens and green card holders in China had already left the memory chip producer.

YMTC's longstanding CEO, Simon Yang, stepped down just ahead of the sanctions reportedly triggered by Washington's increasing pressure on the company.

Price Action: TSM shares closed higher by 0.25% at $63.74 on Friday.