Nvidia and Taiwan Semiconductor Manufacturing Co. are discussing advanced chip packaging technology as Washington weighs tougher export controls on artificial intelligence chips bound for China, according to sources familiar with the talks. The discussions come as the U.S. government seeks to restrict access to cutting-edge semiconductors amid intensifying technology competition.

Advanced packaging has become a key part of the AI chip supply chain, helping connect multiple components into faster and more efficient systems. For chipmakers, progress in this area can shape performance, production capacity, and the pace at which new AI hardware reaches customers.

The talks also highlight the pressure on global semiconductor firms trying to navigate shifting trade rules while meeting demand for high-end chips. If the U.S. tightens restrictions further, companies across the sector could face added uncertainty in planning production, sales, and international partnerships.

Reuters reported the discussions as part of broader industry efforts to adapt to U.S. export policy changes. Neither Nvidia nor TSMC has publicly detailed any agreement, and the scope of the talks remains unclear.