Chinese AI chip maker reduces specifications to ensure TSMC's production orders
Reuters reported, citing people familiar with the matter, that some Chinese artificial intelligence (AI) chip companies are currently designing less powerful processors so that they can continue to be produced by TSMC despite U.S. sanctions.
Sources said that the latest export controls implemented by the United States in October last year exposed China's limited advanced chip production capacity and that Chinese AI chip design companies still rely heavily on TSMC, the world's leading chip foundry.
It is reported that China's two top AI chip companies, MetaX and Enflame, submitted downgraded chip designs to TSMC at the end of last year to comply with U.S. restrictions. Shanghai-based Muxi has developed a downgraded product called the C280 and said its most advanced GPU product, the C500, was out of stock in China earlier this year.
The source also said that although China has an estimated 44 wafer foundries, only SMIC (00981) is capable of mass-producing advanced GPUs. Until recently, SMIC's production capacity was entirely reserved for Huawei.
Reports indicate that SMIC this year agreed to allocate a certain amount of production capacity to Chinese AI chip companies that are directly sanctioned by the United States and banned from overseas OEMs. One of them is Cambrian with a national background. According to sources, the United States will take restrictive measures against the company at the end of 2022, fearing that it may provide AI chip technology to the Chinese military. The company has struggled ever since.