US to Push TSMC and Samsung to Tighten Flow of Chips to China

The US plans to unveil more regulations aimed at keeping advanced chips made by Taiwan Semiconductor Manufacturing and other producers from flowing to China, part of a flurry of measures introduced by the Biden administration during its final days in office.

The latest measures would seek to encourage chip producers like TSMC, Samsung Electronics and Intel to more carefully scrutinize customers and increase due diligence, according to people familiar with the matter. The changes follow an incident where TSMC-made chips were secretly diverted to the blacklisted Chinese company Huawei Technologies.

The rules, which could be unveiled as soon as Wednesday, would build on global semiconductor restrictions that the Biden administration published on Monday. Those curbs limit the sale of AI chips by the likes of Nvidia and other advanced makers to data centers in most countries.

Washington is keen to eliminate backdoors through which Chinese customers such as Huawei are still acquiring advanced chips. The new regulations would target the world’s largest manufacturers of semiconductors, aiming to cut off supply at the source.

Under the draft regulations, all chips at a threshold of 14 or 16 nanometers and below would be presumed restricted under the separate worldwide controls and require a government license to sell in China and other covered nations, said the people, who asked not to be identified because the plans haven’t been announced.

But there are several ways for chipmakers to overcome that presumption, given the goal is to identify Chinese firms that may be trying to skirt US rules to make advanced chips.

The Commerce Department’s Bureau of Industry and Security, which oversees semiconductor export controls, declined to comment.

(Bloomberg)