TSMC has stopped new orders from Huawei due to US measures

TSMC is said to have stopped new orders from Huawei due to restrictions introduced by the United States. Orders that are already in production and orders that have already been taken are expected to be delivered in the coming months.

Taiwanese chip maker TSMC is no longer taking new orders from Huawei to comply with the rules. That’s what sources tell Nikkei Asian Review. Orders delivered before mid-September may still go through. TSMC has not responded substantively to the message and says it will not make any statements about contracts with customers.

The US government introduced new export-restricting measures last Friday, targeting China’s Huawei. Under those restrictions, companies that use US software or technology are only allowed to supply chips to Huawei with a license. The measure will take effect in four months.

Huawei is the second largest consumer of chips at TSMC after Apple. As a major customer, the Chinese manufacturer can use the latest production processes. It is believed that Huawei has already signed contracts with TSMC to make 5nm chips, which are in production and will be delivered later this year.

If Huawei is unable to purchase chips from TSMC, the company will have to look for alternative suppliers. For the delivery of 14nm chips, Huawei has already switched to the Chinese SMIC. That semiconductor manufacturer now supplies midrange SOCs. For example, there is now the Kirin 710A, made on SMIC’s 14nm process. Previously, Huawei had the Kirin 710 made at TSMC on a 12nm process.

However, few chip manufacturers offer comparable processes to TSMC. The South Korean Samsung can also make 5nm chips, but it is likely that American technology is also involved. There are no Chinese semiconductor manufacturers making 7nm and 5nm chips. According to cnTechPost, SMIC has announced that it will set up a 7nm node, which should be ready for production by the end of this year.