TSMC halts new orders from Huawei as the US tightens its export controls

TSMC halts new orders from Huawei as the US tightens its export controls

TSMC halts new orders from Huawei as the US tightens its export controls

According to a report from the Nikkei Asian Review, TSMC is cutting off Huawei from its chip manufacturing capabilities in response to the US’ latest export controls, which apply to “all non-U.S. chip manufacturers using American chipmaking equipment”. 

TSMC can fulfil existing orders for Huawei and its subsidiary HiSilicon, assuming these orders can be fulfilled before mid-September. At the time of writing, Huawei/HiSilicon is said to be TSMC’s second-largest customer, though the market’s strong demand for TSMC’s 7nm and 5nm silicon will likely see the company’s spare fab space occupied by orders from other manufacturers.

Huawei is the world’s largest telecom equipment manufacturer and the world’s second-largest smartphone producer. Both of these markets rely on using cutting-edge chipmaking technologies to remain competitive, making their inability to access TSMC’s fabs a critical blow against the company’s hardware roadmap. China’s homegrown chip producers cannot offer the same cutting-edge production techniques as TSMC, placing Huawei several steps behind those who can access TSMC’s manufacturing facilities. 

The US’ actions against Huawei will likely see China take countermeasures against the US, actions which could put a huge strain on the US economy. Huawei has been preparing for the US to make this move and has been stockpiling components to allow the company to continue making products until it can transition to non-US tech. 

With the US’ new regulations, Chinese companies must apply for a license to receive further shipments of restricted technologies or items. This news came to light shortly after TSMC confirmed its plans to build a new chipmaking facility in the US. 

 

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