TSMC Stops Taking New Orders From Huawei Due to Tighter US Export Controls


Huawei 5G

TSMC, the world’s biggest chipmaker has apparently halted new orders from Huawei due to tighter US export controls.

“TSMC has stopped taking new orders from Huawei after the new rule change was announced to fully comply with the latest export control regulation,” a source told Nikkei. 

Apparently the change will not affect Hauwei’s orders already in production or those that TSMC took before the new ban. This could continue to proceed if those chips could be shipped before mid-September.

On Friday, the US government announced new controls that barred semiconductor makers that use US technology from shipping to Huawei without their permission. “This is a licensing requirement. It does not necessarily mean that things are denied. We tend to approach Huawei with some concern, but this is a measure that gives the US government visibility into what is moving,” the BBC reported.

This move will be particularly difficult for TSMC. Huawei is the company’s no.2 customer yet they have to follow the US rules.

Huawei depends on TSMC to manufacture their AI processors and networking chips for Huawei. Huawei is the biggest telecom equipment producer and the second-biggest smartphone maker, so losing a customer of this nature will be particularly hard for TSMC.

Last month, Huawei had hinted that they are floating the idea of buying chips from Samsung Electronics. They also explored domestic chip production through China’s Semiconductor Manufacturing International Corporation.

Huawei was not too happy about the news. “Our business will significantly be impacted,” Huawei’s Rotating Chairman, Guo Ping said. “Given the changes in the industry over the past year, it dawned on us more clearly that fragmented standards and supply chains benefit no one, If further fragmentation were to take place, the whole industry would pay a terrible price,” he said as per Bloomberg.