On Thursday, TSMC confirmed that it had stopped processing new Huawei orders on May 15.th. The news is the company’s first official statement on the matter, since the expansion of US Commerce Department rules to demand sales licenses from Huawei for semiconductors that use American technology.
Under the rule change, Taiwan-based TSMC is not allowed to sell Huawei silicon products unless the Chinese seller receives (an unlikely) license from US regulators. Huawei and TSMC had been granted a 3-month grace period in which existing orders were allowed to process and ship. TSMC confirmed yesterday that the manufacturer does not plan to send any wafers to Huawei or HiSilicon after September 14.th.
It has been speculated that Huawei had been moving the United States ban forward and placing large orders with TSMC in order to have a sufficient supply of silicon for the rest of the year. However, once this stock is depleted and if the political situation is not resolved by then, it would spell big trouble for the Chinese seller. Beyond the consumer business segment of Huawei that had become the number 2 provider of smartphones in the world, behind Samsung and ahead of Apple, Huawei is a major player in the cellular infrastructure market, where it is currently the leading player for telecommunications equipment.
HiSilicon is also a big player in the DTV SoC market, IP Camera SoC market, and more recently a market player in server CPU with its internal Kunpeng 920 chip and custom microarchitecture. With no means to manufacture his designs, he leaves the company in a precarious situation. It is also unlikely that other semiconductor foundries will be able to choose Huawei as a customer, as they all use equipment made in the US In theory, even Shanghai-based SMIC would be prohibited from supplying Huawei, in practice we have not yet heard no confirmation on the situation there.
As for TSMC, Huawei represented the manufacturer’s largest customer with a 23% revenue share in 2019. Surprisingly, the company claims that Huawei’s ban is unlikely to have an effect on the company’s revenue, as others Customers can collect the coveted manufacturing capacity. The company even forecasts 20% annual growth for the July-September period, and is further increasing its capital spending for the year to $ 17 billion.
