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China’s semiconductor industry is facing significant problems in the wake of US-imposed export controls. Companies like Alibaba and Biren have been developing chips that could compete with the most powerful designs from AMD and Nvidia, but the restrictions have halted production at Taiwan-based TSMC. Engineers are now looking at ways to dumb-down these chips to skirt the rules, hoping that TSMC will restart production. It’s going to be an uphill battle, though.

The rules announced by the US Commerce Department last month block the export of powerful semiconductors to China, which could allegedly be used to develop weapons and abuse human rights by enhancing the government’s already far-reaching surveillance apparatus. TSMC is not under the authority of the government, but like most semiconductor fabs, it relies on US technology and software. Therefore, it has to abide by the restrictions if it wants to stay in business. Previously, the government forced US-based Nvidia and AMD to stop selling technology to China.

In the weeks after the export controls went into effect, TSMC was forced to halt production of Biren’s new BR100 GPU, which was the product of years of research. According to engineers who spoke to Ars Technica, Biren didn’t play it close enough to the chest. The company held a glitzy event in August to unveil the BR100, touting its AI performance and 5nm design. Being so open with the chip’s capabilities gave TSMC little choice but to halt production.

The Commerce Department’s standards for what qualifies as a high-performance chip are vague. The government says chips offering bidirectional transfer speeds greater than 600 gigabytes per second cannot be exported to China, but there are multiple ways to calculate that number. Both Biren and Alibaba are looking at ways to cap the performance of their chips, which would allow them to salvage some value after spending years on the design process.

Biren’s publicly available specs previously showed a transfer rate of 640 GB/s, putting them on the wrong side of the line. The company has updated its site with new specs listing just 576 GB/s. A combination of binning and code adjustments could give TSMC the cover it needs to proceed with manufacturing. Alibaba’s T-Head semiconductor group is looking at potential modifications to its 5nm chip that could make it acceptable for import, but that likely means months of delays and another $10 million spent on a trial run at TSMC.

Washington’s new limit on China’s access to high-performance computing comes on the heels of the CHIPS Act, which included funding to boost US semiconductor manufacturing. Currently, TSMC produces over half of the world’s semiconductors, and it’s barely 100 miles from mainland China on an island the country claims as its territory.

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