US chip restrictions hinder AI ambitions of China’s top chip foundry, CEO says

The chief executive of China’s top foundry said on Friday that the company cannot take full advantage of surging demand for artificial intelligence (AI) chips because of US restrictions on advanced-node technologies.

US sanctions have prevented the Shanghai-based foundry from importing advanced tools needed to upgrade its processing and narrow its technological gap with international rivals such as Taiwan Semiconductor Manufacturing Company (TSMC). Yet Zhao suggested SMIC could still be benefiting from the industry-wide AI boom.

“AI is a blessing for semiconductor manufacturing,” Zhao said during an earnings conference call with analysts on Friday. “It can bring us business growth in many years ahead.”

The AI boom over the past couple of years has led to a surge in demand for global foundries, which have rushed to reconfigure their production mix to focus on graphics processing units (GPUs), the chips that power much of the training of AI models. TSMC, the world’s largest contract chipmaker, said in October that it is bullish about its outlook for the next year because of solid AI demand.