Huawei Speaks Regarding TSMC Chips

Huawei Speaks Regarding TSMC Chips

Last week the US Department of Commerce released an order essentially barring Huawei, a large Chinese tech company, from receiving items that were made via export controlled by US technology. The ban was placed to bar malign use of US technologies and cybersecurity based concerns. For semiconductor production Huawei primarily uses TSMC, a major player in the semiconductor business headquartered in Taiwan, as does Apple and the likes. Huawei previously stated they would look at Samsung built chips but just might have to consider it this time around. 

As of today TSMC will not be taking new chip orders from Huawei in an effort to maintain good relations with the US Administration and the State of Arizona. This wasn’t something they found easy to do as Huawei is said to be their second largest customer. The decision comes on the heels of TSMC announcing plans to build a factory in Arizona to produce a 5nm chip.

While this does affect new orders, existing orders placed by Huawei to the chip giant will continue to be produced so long as TSMC manages to ship before the 120 days given by the US department of Commerce are up in mid-September. 

As you could imagine, those within Huawei are not pleased by this news. Huawei and their rotating chairman Guo Ping had a few choice words for the US government, irate at what they call the US’s attempt to try to “leverage its technological strengths”.

A viable alternative the large tech company might be forced to consider is nurturing a relationship with Semiconductor Manufacturing International Corporation (SMIC), a small competitor to TSMC based in China. While it would take a considerable amount of time to scale up to what Huawei would need for their progressive technologies, that would be time well spent by aiding a supplier within their own borders.

This news is unfortunate for a large company like Huawei and their progress but could have negative implications for US based technologies. In time we will gain a full understanding how this ban might affect players in the field.

Leave a Reply