Biden likely to block TSMC and Samsung from making AI chips for China: analyst By Investing.com
Investing.com — Jefferies analysts noted a Reuters report that said President Biden could impose new restrictions on China’s AI chip production before his term ends on January 20.
The restrictions are expected to have two main components: a ban on AI chips from certain countries that help China develop artificial intelligence, and a ban on foundries like TSMC and Samsung ( KS: ) from producing AI chips for Chinese companies.
Jefferies emphasized the high likelihood that these restrictions will target TSMC and Samsung, noting that “preventing TSMC and Samsung from making AI chips for China is highly likely to happen.”
Analysts noted that TSMC has already suspended production of 7nm chips for its Chinese customers pending further regulatory details.
Expected limitations would include a detailed definition of “advanced AI chips” based on factors such as processing node, die size, and use of CoWos and HBM specifications.
Jefferies points out that the aim of these measures is to tighten existing deficiencies and ensure compliance.
The restrictions are expected to particularly affect Chinese companies that design GPUs, ASICs and ADAS chips, such as Alibaba (NYSE: ), Baidu (NASDAQ: ) and Horizon Robotics.
Jefferies notes that this policy could face implementation challenges, particularly in relation to the involvement of third countries.
They argue: “This will risk damaging US relations with these countries, some of which are ‘delicate’ friends of the US.”
Moreover, the company says the policy could strain international relations because it could be seen as coercive.
Despite the potential difficulties, Jefferies believes the Biden administration is committed to tightening regulations on the production of artificial intelligence chips, which a potential Trump administration is unlikely to overturn.
