TSMC on Thursday has confirmed that it had stopped processing new orders from Huawei back on May 15th. The news is the first official statement from the company on the matter, since the US Commerce Department’s expansion of rules to require licenses for sales to Huawei of semiconductors which us US technology.

Under the rule change, Taiwan based TSMC is not allowed to sell to Huawei silicon products unless the Chinese vendor receives (an unlikely) license from US regulators. Huawei and TSMC had been given a 3-months grace period in which existing orders were allowed to be processed and shipped. TSMC yesterday has confirmed that the manufacturer does not plan to ship any wafers to Huawei or HiSilicon after September 14th.

It’s been wildly speculated that Huawei had been pre-empting the US ban and making very large orders to TSMC to be able to have a sufficient silicon supply for the rest of the year. However, once this stock runs out and if the political situation hasn’t been resolved by then, it would mean big troubles for the Chinese vendor. Beyond Huawei’s consumer business segment which had grown to be the #2 smartphone vendor in the world, behind Samsung and ahead of Apple, Huawei is an important player in the cellular infrastructure market where they are currently the leading player for telecommunications equipment.

HiSilicon is also a big player in the DTV SoC market, IP camera SoC market, and most recently an entrant in the server CPU market with their in-house Kunpeng 920 chip and custom microarchitecture. Without means to manufacture their designs, it leaves the company in a precarious situation. Other semiconductor foundries are also unlikely to be able to pick up Huawei as a customer as they all use US-made equipment. In theory, even Shanghai based SMIC would be banned from supplying Huawei – in practice we haven’t heard any confirmation on the situation there yet.

As for TSMC, Huawei represented the manufacturer’s biggest customer with a 23% revenue share in 2019. Surprisingly enough, the company states that the Huawei ban is unlikely to have an effect on the company’s revenues, with other customers being able to pick up coveted manufacturing capacity. The company even forecasts 20% year-on-year growth for the July-September period, and is further increasing its capital expenditure for the year to up to $17bn.

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Source: Nikkei Asia

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  • mattbe - Wednesday, July 22, 2020 - link

    Classic whataboutism that serves nothing but to deflect the responsibility of the Chinese. Just because it has been done in the past by other countries is not a justification for IP infringement. It's even more hilarious when you ignore that some things that are deemed acceptable in the past might not longer acceptable in the present.
  • LiKenun - Wednesday, July 22, 2020 - link

    “My buddies and I got away with it in the past and we’re raking in the profits. But you gotta play by the rules because now we play by the rules.”
  • s.yu - Monday, July 27, 2020 - link

    Of course. Back to the analogy that got deleted, the ancient Egyptians built the pyramids with slavery thousands of years ago. Your argument suggests that you proudly expect to get away with slavery today.
  • s.yu - Monday, July 27, 2020 - link

    Yeah, basically we already said what you said but most of the thread got deleted.
  • Gc - Sunday, July 19, 2020 - link

    "their joint venture with ARM (where they control the 51% of the company)"
    (Just to be clear, 51% of ARM Technology China, the former subsidiary in China, was sold in 2018 to create the joint venture, not 51% of ARM.)
  • Samus - Friday, July 17, 2020 - link

    This is something smart politicians around the world have realized for decades. China's "ability" to scale is a global threat because they have an enormous population and the infrastructure is decades ahead of India and other 'scalable' countries.

    For this reason, particularly from a national security (read: military) perspective, we have attempted to keep China in a frienemy position where all sides are mutually comfortable. Now that China is uncomfortable due to reckless international pressure on its government and private sector, it's free to scale up and become self-reliant.

    This is a disaster for world order, because China is NOT a democracy.
  • bigvlada - Saturday, July 18, 2020 - link

    Don't worry, in a few decades the Chinese will start whining about the Indians stealing their trade secrets. And India is a democracy. As if that matters.
  • s.yu - Saturday, July 18, 2020 - link

    "Now that China is uncomfortable due to reckless international pressure"
    I think you've had it the other way around. There was about a month's time in which China was condemned by the majority of the international community regarding the Coronavirus, but China's been bolder than before since the start and shows no sign of relent. Circling aircraft carriers around Taiwan was months ago, then quashing HK dissent and replacing the whole government with its loyalists, which they've been quietly doing gradually by manipulating elections anyway(For some reason they claim they could rightfully ban HK citizens from emigrating to other countries, and I can't wrap my head around their legal or moral justification, if they even bothered with one?), and last month it was that brawl with India. Having examined whatever evidence I could get my hands on from both sides, I say India's innocent, or they would've spun a lie a magnitude more sophisticated than China's, because their story goes back decades to when Zhou Enlai once revealed a map in an international meeting supporting their current claim(which means every participant country would have records, and is nearly impossible to fake), to books from the 70's by European authors, and their current claim is accurate down to the patrol point, also mentioning previous Chinese aggression in another point along the border about 100km south of the brawl.
    OTOH, China's claim boils down to a line seen with their claim in all border disputes , "自古以来", i.e. "since ancient times"/"that which has always been". China's claim is vague and goes on nothing but its official statements(also vague) and its puppet media parroting the Xinhua agency.
    You're welcome to make a preliminary evaluation of my conclusion by comparing the amount of information on Wikipedia against that of Baidu Baike, and of course, all the Chinese media you could find against all the Indian media you could find, if you're eager, but AFAICT the discrepancies between the free encyclopedia and the "regulated" encyclopedia are quite representative of the whole picture.
  • t.s - Monday, July 20, 2020 - link

    1. "..about a month's time in which China was condemned by the majority of the international community regarding the Coronavirus." Don't be racist.

    2. "..quashing HK dissent and replacing the whole government with its loyalists." Maybe we can study again the relation between Hongkong, China, and Great Britain.

    Yes, China has their fault, especially with their boundaries. Not just India, but with Vietnam, Indonesia, Philippine too. But still, they're still better by far than what US-and-allies did until now. Iran. Syria. Indonesia. Vietnam, etc..

    With someone like DT, don't think that it will end just with Huawei. When you're not adhere to them, or when you're on par with, say, Huawei, you can become their target too.

    Bottom line is: what has been and will be done by this man can harm global technology progress. Except, if the progress is from US, or allies.
  • s.yu - Monday, July 20, 2020 - link

    1. There's nothing racist about simply stating the truth, unless you're one of those radical left.
    2. GB yielded under circumstance that HK be governed under the Basic Law for 100 years. Years ago when the Party broke faith regarding universal suffrage, it could only be regarded as a non-violation if the phrasing of the Basic Law were interpreted in a particularly twisted fashion. Such instance could still be regarded as miscalculation on the British side because the wording wasn't completely immune to malicious interpretation, but the Orwellian "National Security Law" is quite blatantly infringing on the autonomy of HK. Article 38 is especially devious as it encompasses the whole world. China, whose puppet congress passes any law directed by the Standing Committee anyway, passes a law that allows it to "legally" target every single individual around the world.

    >Iran. Syria. Indonesia. Vietnam
    Iran has nothing to do with the US, its secular government collapsed on its own and is now unfortunately ruled by religious fanatics. In a way that's similar to China though, since the Party's propaganda borders on religious preaching, or that used in pyramid schemes.
    I don't think you can claim moral high ground by stating that Arab Spring had an unjust cause, and the Syrian situation evolved from Arab Spring.
    Vietnam(half) and Indonesia, yes, those are on the US, in the backdrop of the cold war, but then Khmer Rouge is on China too, and that's what China achieved as a minor player decades ago. With the new aggressions in these ongoing disputes today, it's hard to say how far China will go.

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