China's Taiwan Affairs Office said on Wednesday that a U.S. order to Taiwan Semiconductor Manufacturing Co to halt shipments of advanced chips to Chinese customers undermines the interests of Taiwanese companies and raises tension across the Taiwan Strait.

After a chip manufactured by Taiwan Semiconductor Manufacturing Company was found inside a Huawei processor, the US Department of Commerce has ordered the

The Taiwanese chip giant will halt shipments to Chinese companies after some of its most advanced chips ended up with Huawei.

The US order comes just weeks after TSMC notified that one of its chips had been found in a Huawei AI processor.

China's semiconductor index leapt close to a three-year high on Monday on bets a U.S. order halting Taiwan Semiconductor Manufacturing Co's shipments of advanced chips to Chinese customers could accelerate Beijing's self-reliance efforts.

The U.S. has reportedly ordered the world’s largest chipmaker not to send its advanced artificial intelligence chips to China anymore.

It turns out that TSMC did not voluntarily stopped supply of advanced AI processors, it was told to by the American government.

A wider shipment ban on TSMC-made chips could affect a range of mainland businesses from electric vehicles to smartphones.