TSMC will stop chip deliveries to Huawei in September

Chip manufacturer TSMC stopped processing new chip orders from Huawei and subsidiary HiSilicon on May 15, and delivery will stop on September 14. TSMC thus complies with US sanctions against Huawei.

TSMC is still handling pending orders for Huawei, but will cease shipments of wafers with chips completely on September 14, unless the US sanctions change. The company confirms this in an explanation of the quarterly figures, Nikkei writes, which previously reported on the stopping of TSMC’s deliveries to Huawei from September.

The supply freeze is the result of the export-restrictive measures against Huawei that the US announced in May. They determined that companies were no longer allowed to supply chips that used American software or technology to Huawei and subsidiaries such as HiSilicon without a license. Huawei is therefore forced to turn to alternative suppliers, such as the Chinese SMIC. None of these alternative providers can make chips on small production processes, as TSMC or Samsung can, for example. According to rumors, Huawei wants to use chips from MediaTek and Unisoc.

TSMC’s revenue grew 28.9 percent in the second quarter of 2020, mainly due to customer investments in 5g infrastructure and high performance computing. The 7nm processes accounted for 36 percent of the wafer turnover. For the coming quarter, TSMC expects strong demand for 5nm and 7nm chips for 5g smartphones, hpc and internet of things. However, the company also foresees an uncertain time when suppliers may start to dispose of existing inventories. TSMC did not elaborate on the impact of stopping deliveries to its major customer Huawei.