Huawei switches to Chinese semiconductor manufacturer SMIC to supply 14nm chips

HiSilicon, a subsidiary of Huawei, has reportedly moved its 14nm silicon orders from TSMC to China’s SMIC. This is reported by Digitimes sources. The company would also purchase fewer 7nm and 5nm chips due to decreased smartphone sales.

Huawei would have made the switch to SMIC due to the current political situation with the United States, TechPowerUp reports via Digitimes. The US government is said to be planning to thwart TSMC deliveries to the Chinese tech manufacturer. The switch to a Chinese manufacturer would give the company peace of mind in this area.

At the same time, the Chinese smartphone manufacturer would purchase fewer 7nm and 5nm chips for high-end smartphones from TSMC, Hexus reports. The company would do this because fewer smartphones are being sold due to the corona crisis. It is not yet clear whether Huawei will purchase such chips from SMIC. The Chinese semiconductor manufacturer will start producing 7nm chips at the end of 2020.

AMD, Apple and Nvidia are now going to use the production capacity that TSMC has deployed for Huawei so far, according to sources from Taiwan. For example, Apple is said to have asked TSMC to supply an additional 10,000 wafers per month for the next generation of Apple mobile equipment in TSMC’s fourth quarter, on top of the current production for Apple. The company will probably have the upcoming iPhone socs made at 5nm. AMD would also like to book 5nm production capacity with TSMC at the end of this year. Both AMD and Nvidia would also have increased its purchase of 7nm wafers. The switch from Huawei will therefore probably have no financial consequences for the Taiwanese semiconductor manufacturer.

A TSMC factory in Taiwan