Taiwan Semiconductor Manufacturing Co. said orders for advanced-process chips from Nvidia climbed 40% in the latest quarter, underscoring strong demand for AI hardware even as U.S. export restrictions on shipments to China remain in place.

The surge highlights how major chipmakers continue to navigate tighter trade rules while racing to supply the fast-growing artificial intelligence market. Nvidia has been one of the biggest buyers of TSMC’s most advanced manufacturing capacity, which remains central to high-end AI accelerators and data-center products.

The reported increase comes as Washington maintains controls aimed at limiting China’s access to cutting-edge AI chips. Those rules have reshaped supply chains and forced semiconductor firms to adjust sales strategies, production planning, and customer allocation.

For TSMC, the demand from Nvidia signals that global appetite for advanced chips is still outpacing supply in key segments, even as geopolitical pressure adds new constraints to the industry.