On Friday, the Trump administration banned any chipmaker using American equipment from supplying China’s Huawei Technologies Co. without U.S. government approval. That means the world’s preeminent chipmaker TSMC and rivals must cut off Huawei unless they get waivers from the U.S. Commerce Dept. TSMC has already stopped accepting new orders from Huawei, Nikkei Asian Review reported Monday.
The U.S. already blacklisted Huawei last year, preventing American companies from supplying the Chinese company unless they got a license. The latest move tightens those restrictions to prevent chipmakers — American or foreign — from working with Huawei and its secretive chip-design unit HiSilicon on the cutting-edge semiconductors they need to make smartphones and communications equipment. The Trump administration sees Huawei as a dire security threat… “We must amend our rules exploited by Huawei and HiSilicon and prevent U.S. technologies from enabling malign activities contrary to U.S. national security and foreign policy interests,” Commerce Secretary Wilbur Ross said in a tweet.
Huawei’s products meanwhile are likely to suffer, putting them at risk of falling behind those of rivals like Apple… For TSMC, it’s growing ever more difficult to remain neutral amid the growing tensions between the U.S. and China. The company brands itself “everybody’s foundry,” effectively the Switzerland of the tech industry. It supplies Chinese customers like Huawei and the American military, while relying on U.S. producers of semiconductor-making equipment like Applied Materials and Lam Research.
TSMC did take one step closer to the U.S. last week, saying it would build a $12 billion chip plant in Arizona.
Meanwhile, China appears to be preparing to retaliate for the new restrictions on Huawei. On Friday, the Global Times — a Chinese tabloid run by the flagship newspaper of the Communist Party — reported Beijing was ready to initiate countermeasures, including imposing restrictions on Apple, suspending the purchase of Boeing airplanes and putting U.S. companies on an ‘unreliable entity list.’
MacDailyNews Take: This balancing act has lots of parts in motion currently!
As for TSMC chip fabrication plant bound for Arizona, it will use TSMC’s 5-nanometer process technology and be capable of producing 20,000 semiconductor wafers per month. Over 1,600 jobs are expected to be created directly by the construction project. The company plans to commence construction next year, with production starting in 2024. The total cost including capital expenditures is estimated to be approximately $12 billion, spread out between 2021 and 2029.