After US restricts trade with Beijing, Taiwan’s TSMC suspends orders from Chinese company

After the United States restricted trade with seven Chinese supercomputing centres, Taiwan Semiconductor Manufacturing Company (TSMC) has suspended new orders from Phytium Information Technology Co, one of the Chinese organisations, that was put on the US Entity List last week.

TSMC will complete orders placed before the US Commerce Department’s Bureau of Industry and Security added the entities to the trade blacklist on national security grounds, South China Morning Post (SCMP) quoted a person familiar with the matter.

A TSMC representative declined to comment on the matter but said the company would “abide by all the laws and regulations as always, and will operate according to the export restrictions”, without elaborating further.

Last week, the US restricted trade with top Chinese supercomputing centres, as these capabilities, can be used for the development of modern weapons and national security systems.

The seven centres were put on the US government’s entity list, which means they require special permission for exports and imports from the United States, SCMP reported.

This comes amid rising tension between the two countries over issues including human rights violations, trade and China’s military aggression.

Even as China has sought to boost self-reliance in semiconductors in recent years, it remains highly reliant on overseas chips. The country’s supercomputers primarily use CPUs from Intel, AMD and IBM, according to Francis Lau, a computer science professor at the University of Hong Kong, SCMP reported.

“The sanctions would definitely affect China’s ability to keep to its leading position in supercomputing because all current supercomputers use mostly US-built components,” he said. “Although there are alternatives made by other countries such as Japan and [South] Korea, the best components are still by the US.”