The U.S. has reportedly asked Nvidia, Apple’s key supplier Taiwan Semiconductor Manufacturing Co TSM to halt shipments of chips used in AI applications to customers from China.

What Happened: The U.S. asked TSMC to not ship the advanced chips starting Monday in a letter from the Department of Commerce, Reuters reported, citing a person familiar with the matter. The order pertains to certain chips, of 7 nanometers or more advanced designs, that power AI accelerator and graphics processing units, the report said.

The U.S. Department of Commerce reportedly sent the letter to TSMC weeks after the company informed the department that one of its chips had been found in a Huawei AI processor.

Huawei is on the U.S.’ restricted trade list, mandating suppliers to get licenses for any goods or technology shipped to the company.

Why It Matters: It is not evident how the TSMC chip ended up on Huawei’s Ascend 910B “multi-chiplet” processor. However, TSMC has notified its affected clients from China that it is suspending shipments of the chips starting Monday, the report said.

The Commerce Department sent similar letters to Nvidia and AMD restricting their ability to export AI chips to China in 2022.

The restrictions imposed in those letters were later turned into rules, Reuters noted.

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