TSMC Cuts Off Computer Chip Sales To Huawei In September
Back in May, it became clear that TSMC was going to cut off Huawei Technologies, the Chinese technological giant whom the US Government has decided to sanction. Due to the United States’ newest export controls, the nation is restricting “all non-U.S. chip manufacturers using American chipmaking equipment”, in an effort to destroy the bastion of Chinese technology. Now, TSMC has confirmed that they have no plans to ship chips to Huawei after September 14th. TSMC hasn’t taken any orders from Hauwei since May 15th.
Taiwan Semiconductor Manufacturing Co. on Thursday confirmed it has suspended processing new orders from key customer Huawei Technologies to comply with U.S. export regulations, but said it can still achieve more than 20% revenue growth this year thanks to strong demand for 5G smartphones, infrastructure and high-performance computing applications.
TSMC does not expect the new legislature to inflict them much harm. Development into 7nm, 5nm, and 3nm technologies has yielded multitudes of eager new customers. AMD and Nvidia will utilize TSMC for large batches of upcoming products. Apple is also reportedly interested in partnering with TSMC to manufacture upcoming ARM products for Mac. And although mobile sales are down, the need for expensive 5G equipment is expected to increase sales in that sector, too.
The US’ actions against Huawei has already seen the UK move away from the company’s technologies, as Huawei’s further reliance on Chinese silicon has added to existing security concerns. The British Government has told telecoms to remove Huawei 5G equipment from their network by 2027 and cease installing new Huawei equipment by the end of this year. When Huawei has to rely solely on Chinese manufacturing, fears of “Chinese Backdoors” and other security faults become difficult to ignore.
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.
The company said that it is ramping up capital spending for the current year, despite the ongoing Covid-19 outbreak. It will now add another $1 billion in its 2020 plan for spending on new equipment, taking the budget as high as $17 billion.