TSMC will stop supplying advanced chips, 7nm or more, to Chinese clients due to a United States directive.

Industry analysts, including TrendForce, expect this decision to impact China’s AI sector. However, they forecast a revenue decline of only 5-8% for TSMC.

Advanced processing accounts for 67% of TSMC’s revenue, mostly from Europe, the US, and Taiwan, suggesting minimal disruption.

TSMC’s revenue from China was 11-13% recently, with just 1% coming from China’s cloud AI semiconductor sector, according to Morgan Stanley.

Recent Taiwan Semiconductor Manufacturing Company developments