Taiwan Semiconductor Company stock (NYSE:TSM)Shares of the semiconductor maker fell today after Reuters reported that the U.S. Department of Commerce had ordered the company to immediately halt exports of its advanced chips to China.
As of 4 p.m. ET, TSM stock was down 3.56%.
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The U.S. government is cracking down on chipmakers exporting artificial intelligence (AI) processors to China, but some chips have slipped through the cracks. TSM announced last month that one of its processors was somehow placed in Huawei’s AI data center. Huawei is a Chinese company on the trade restriction list.
TSM is in regular contact with the US government and today received a letter from the Department of Commerce stating that it cannot send its 7-nanometer or other advanced chips to Chinese companies.
The United States and China are competing for AI supremacy, and the United States is concerned about China’s potential military use of advanced chips. Because of these concerns, the government has placed limits on the types of chips that companies can sell to China.
TSM is not the only company subject to restrictions. Nvidia and Advanced Micro Devices also reduced semiconductor exports to China.
Approximately 11% of TSM’s sales in the third quarter came from China, so investors shouldn’t have to worry too much that reduced sales to Chinese companies will severely hamper the company’s growth. . However, we need to keep an eye on rising tensions between the US and China, as further geopolitical instability could weigh on TSM stock.
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