TSMC has submitted its opinion to the US: it hopes to continue supplying Huawei after the buffer period expires

Latest update time：2021-08-31 13:13

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According to Taiwan media Juheng.com, chip foundry leader TSMC has submitted an opinion letter to the US government, hoping to continue supplying Huawei after the 120-day grace period of the US ban on Huawei expires.

On May 15 this year, the US Department of Commerce announced the latest ban on Huawei. According to the ban, any company that supplies semiconductor products containing US technology to Huawei must first obtain an export license from the US government.

However, there is a 120-day grace period after the ban is announced. The first 60 days of the grace period are the deadline for the US government to collect opinions from all parties, and companies can submit their opinions by July 14 at the latest.

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Under the ban, Huawei and its affiliates will not be able to use American software and technology to design chips, nor will they be able to use American equipment to produce chips; and chip foundries such as TSMC will not be able to use American semiconductor equipment to manufacture Huawei's self-developed chips.

During the buffer period, chip foundries such as TSMC have already started production projects based on Huawei's design specifications. As long as these chips are delivered to Huawei within 120 days of the new regulations officially taking effect, they do not need to apply for a license from the United States.

Previously, TSMC Chairman Liu Deyin reiterated many times at the shareholders' meeting that he will strive to ship to Huawei, and TSMC will continue to observe the purpose of the US ban and the extent of its implementation.

Liu Deyin also said that if TSMC cannot take over Huawei's orders, there are many customers who want to fill the gap in production capacity and orders, but "we don't want this to happen."

TSMC's 2019 financial report shows that Huawei contributed about 36.4 billion yuan in revenue to TSMC last year, an increase of nearly 80%, and its revenue share in TSMC also increased significantly from 8% to 14%, second only to Apple in revenue contribution. In 2019, Apple's revenue contribution to TSMC reached 58.9 billion yuan, accounting for 23% of TSMC's revenue.

In addition, industry sources said that Qualcomm has also submitted an application to the US government to continue supplying Huawei, hoping to resume supplying Huawei. A foreign report also showed that Qualcomm is continuing to communicate with the US government and has increased confidence in resuming shipments to Huawei.

Previously, American semiconductor chip manufacturers such as Qualcomm were unable to supply Huawei because their products contained more than 25% American technology, forcing the latter to use Japanese, Korean, European and domestic chips as alternatives.

Huawei has also increased its procurement of third-party non-US chips. Industry sources say that Huawei's purchase orders for MediaTek chips have increased by 300% recently.

Some analysts believe that although TSMC wants to continue to obtain chip orders from Huawei, it is difficult for TSMC's application to be approved immediately. Even if it is possible to recover, it will be a partial recovery, such as restricting the use of 5nm advanced processes.

Currently, many chip giants have begun to compete for TSMC's 5nm production capacity. On June 22, according to foreign media reports, Qualcomm has handed over its most advanced Snapdragon 875 mobile phone chip orders to TSMC's Nanke 18th plant, in addition to X60 5G baseband orders.

With the increase in orders, TSMC has rapidly increased the monthly output of 5nm chips at its 18th plant in Southern Taiwan Science Park to about 60,000 pieces, which has filled up the production capacity of some of TSMC's factories.

The United States is increasing its political suppression of Chinese companies such as Huawei. On July 9, Reuters quoted people familiar with the matter as saying that the Trump administration is currently pushing forward a purchase ban on products of Chinese companies such as Huawei and ZTE. Once finalized, it will take effect on August 13 this year, and any company that provides products or services to the White House will be prohibited from using products of five Chinese companies: Huawei, Hikvision, Dahua, Hytera, and ZTE.

However, organizations such as the Professional Services Council (PSC) and the National Defense Industrial Association (NDA) have called for an extension of the ban, both of which believe that now is not the time to "ban" Chinese companies such as Huawei, but should focus more on how the United States recovers from the COVID-19 crisis. The National Defense Industrial Association believes that American companies need more buffer time and said that the ban on Chinese companies such as Huawei should be postponed for at least one year.

Source: Guanchazhe.com

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