The US plans to unveil new regulations aimed at preventing advanced chips, particularly those made by Taiwan Semiconductor Manufacturing (TSM), from reaching China, Bloomberg reported Wednesday.

The report said the new rules would require chip producers like TSMC, Samsung Electronics, and Intel (INTC) to carefully vet customers and increase due diligence, citing people familiar with the matter.

The regulations, expected to be revealed as soon as Wednesday, would build on restrictions published earlier this week, which limit the sale of AI chips by companies like Nvidia (NVDA) to data centers in most countries, the report added.

Under the proposed rules, chips with a threshold of 14 or 16 nanometers and below would be considered restricted and require a government license to be sold to China and other covered nations, Bloomberg said, citing sources.

The measure imposed by the government are due an incident where TSMC-made chips were secretly diverted to the blacklisted Chinese firm Huawei Technologies.

Taiwan Semiconductor Manufacturing, Samsung Electronics, and Intel did not immediately respond to MT Newswires' request for comment.

(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)