TSMC Cuts Off Huawei Following Us Factory Announcement

TSMC has stopped taking chip orders from Huawei following its plans to open a US factory.

TSMC made headlines last week when it announced it was building a factory in Arizona. The factory, slated to begin construction in 2021, will begin production in 2024. The move is aimed at helping increase US-based semiconductor manufacturing and minimizing dependance on overseas factories.

Meanwhile, the US has ramped up its war against Huawei, a company it accuses of helping Beijing spy on governments around the world. The latest effort was an announcement by the Commerce Department on May 15 that it was modifying the Entity List and Foreign Direct Product Rule to ban Huawei from buying semiconductors that use US technology, even those made by foreign companies.

In view of the announcement, a source told Nikkei Asian Review that ”TSMC has stopped taking new orders from Huawei after the new rule change was announced to fully comply with the latest export control regulation. But those already in production and those orders which TSMC took before the new ban are not impacted and could continue to proceed if those chips could be shipped before mid-September.”

Huawei was already beginning to feel the pressure from the US bans before this development and had warned of fallout if this measure was taken. The next few months should be interesting.