The United States has a mission to prevent China from accessing advanced semiconductors. It doesn't hurt that some of the world's top semiconductor firms are based in countries that are longstanding allies of the US – Taiwan and South Korea. That provides the administration with lot of levers to put pressure on its arch rival.
Recent reports have suggested that the US has instructed suppliers like TSMC, the world's largest contract chip manufacturer, to stop supplying 7nm and below chips to mainland Chinese companies. A new report indicates that Samsung has complied with similar directives and informed its customers in China of its inability to continue supplying chips made on the 7nm and below processes.
US cuts off China's access to 7nm and below chips
Advanced chipsets made on the 7nm and subsequent nodes are crucial for Chinese companies as the race for AI dominance heats up. The US has been laser focused on cutting off China's access to these advanced semiconductors. It has utilized trade controls to prevent companies that use US equipment and software or trade with American companies from selling chips to Chinese buyers.
Samsung's clients in China include Baidu, one of the country's top tech companies. With Taiwan-based TSMC and South Korea-based Samsung both complying with recent directives, it goes without saying that US-based Intel will follow suit as well and similarly inform its customers in China of its inability to provide them with chips.
TSMC accounts for more than 65% of the global chip market so the loss of this business will probably sting a bit less than it will for Samsung. The conglomerate's foundry division has been bleeding cash and is said to have shut 50% of its production capacity due to a lack of orders. Losing vital business at a time of such uncertainty is definitely going to be painful for Samsung.
