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TSMC reportedly stopped taking new chip orders from Huawei *updated*

By Cookie Monster - on 19 May 2020, 12:00am

TSMC reportedly stopped taking new chip orders from Huawei

*Note: This article was first published on 18 May 2020 and updated on 19 May 2020 at 10:30am with comments from the Chinese government to the Global Times*

Days after the U.S Department of Commerce amended an export rule to block Huawei's access to overseas chip manufacturers, TSMC reportedly stopped taking new chip orders from Huawei according to Nikkei Asian Review.

Several sources claim TSMC halted new orders from Huawei to comply with the latest export control regulation. However, this does not affect the chips that are already in production and the orders that TSMC took right before the new export rule took effect.

Both companies will suffer significantly from the U.S trade restriction. Huawei is TSMC's second biggest customer; the latter manufactures its mobile processors, artificial intelligence processors and networking chipsets for the Chinese company. Finding another chip manufacturer is no easy task for Huawei as most chip makers are likely to be using U.S technology and equipment.

Huawei has anticipated the U.S to make this move since the end of last year according to Nikkei Asian Review's sources. The Chinese company has been stockpiling more than a year's worth of networking equipment-related chips. The Chinese government also announced in December 2019 that it would dump all U.S components for all government PCs by 2022.

 

*Updated* Tit-for-Tat moves

But the Chinese Government is not expected to take the moves made by the Trump administration lying down. 

According to a report in the Global Times, a source close to the Chinese government told them that China is prepared to put certain US companies on its "unreliable entity list," imposing restrictions on or launching investigations into US companies like Qualcomm, Cisco and Apple in accordance with Chinese laws like the Cybersecurity Review Measures and Anti-monopoly Law, and suspending the purchase of Boeing aeroplanes.
 

Source: Nikkei Asian Review, The Global Times