Technology
Key Huawei chip supplier stops taking orders after new US sanctions have been imposed
Taiwan Semiconductor Manufacturing Co (TSMC), the largest contract chipmaker in the world, reportedly stopped taking Huawei's orders following the new round of sanctions by the US government.
Huawei has been on the US 'non-entity' list since 2019, a designation that bars it from doing business with US tech firms on national security grounds.
Huawei's chips
Over the past year, TSMC has become an increasingly important supplier, manufacturing customized Huawei processors and supplying it with key components such as networking chips. The Chinese mobile giant is now TSMC's second-largest customer, after Apple, accounting for up to a fifth of its revenue.
Nonetheless, Washington plans to raise pressure on Huawei and has closed what it claims to be a "economic loophole" that enables chip makers to insure that their chips are not listed as 'US-made,' while using American technology.
All chip manufacturers wishing to supply Huawei would have to apply for a license, giving the US government more influence over the supply chain of the business.
Nikkei reports that TSMC no longer accepts new orders from Huawei, but will respect current commitments in accordance with the latest US regulations. It is said that the Chinese telecom giant has been planning for any eventuality over the past year and has been processing networking chips.
However, in a statement earlier this week, it appeared that the latest US activity was intentional, malicious, and threatened with the future of its business. A possible option might be to co-develop chip designs with another party, but this would not be an immediate solution.
"The US is using its own technical capabilities to destroy businesses outside its own borders," said Guo Peng, the rotating president. "It would only weaken the confidence that multinational businesses put in US technology and supply chains. At the end of the day, this will damage US interests.
