TSMC Halts New Semiconductor Orders from Huawei Amid Expanded US Restrictions

Taiwanese chipmaker TSMC has stopped taking new orders from Huawei.

Nikkei Asian Review is reporting that Taiwan Semiconductor Manufacturing Company (TSMC) has halted new orders from Huawei as the US tightens export controls. TSMC, which is one of the world’s largest semiconductor makers, counts Huawei as one of its main customers, second only to Apple.

Sources familiar with the situation said that TSMC orders already in production and orders placed before the ban will not be impacted, as long as the chips are shipped before mid-September.

Citing multiple sources, the publication says the decision was difficult for TSMC as Huawei is one of its biggest clients. All of the Kirin mobile processors designed by Huawei subsidiary HiSilicon were so far manufactured by TSMC. In addition to mobile processors, Huawei depends heavily on TSMC for its AI processors and networking chips, as well.  One source said: “It’s a difficult decision for TSMC as Huawei is the company’s number two customer, but the chipmaker has to follow the US rules.”

Huawei has previously suggested that it could switch its chip supply to Samsung in case of a situation like this. The company has also been exploring domestic chip production through China’s Semiconductor Manufacturing International Corporation (SMIC), which just received a $2.2 billion USD investment from the Chinese government.

On Friday, the US Department of Commerce announced a new rule requiring any semiconductor manufacturer outside of the United States to gain a special license in order to sell chips to Huawei if American technology is used at any stage of production.

Huawei rotating chairman Guo Ping has hit back at these stricter export controls intended to stop the Chinese tech giant from obtaining essential chips

“The US is leveraging its own technological strengths to crush companies outside its own borders,” Huawei said in a statement Monday. “This will only serve to undermine the trust international companies place in US technology and supply chains. Ultimately, this will harm US interests.”