The US May Impose Sanctions on TSMC’s Supply of 14-nm Chips to Huawei

According to some news sources, the United States is seeking to impose restrictions on the sale of 14-nanometer chips manufactured by Taiwan Semiconductor Manufacturing Co. (TSMC) for Huawei. The China based company(Huawei) has for long been accused by several countries globally of maintaining close ties to China’s military establishments and the government. This in turn, has made the company’s devices and technology solutions, become the focus of suspicions. Huawei though, has refuted all such accusations.

Headquartered in Hsinchu, Taiwan, Taiwan Semiconductor Manufacturing Co. (TSMC) is the world’s largest dedicated semiconductor foundry. The company supports a thriving ecosystem of global customers, including Huawei and Apple, and partners with the industry’s leading process technology and portfolio of design enablement solutions to unleash innovation for the global semiconductor industry. It serves its customers with global capacity of more than 12 million 12-inch equivalent wafers per year in 2019, and provides the broadest range of technologies from 2 micron all the way to foundry’s most advanced processes, which is 7-nanometer today. It is the first foundry to provide 7-nanometer production capabilities and the first to commercialize Extreme Ultraviolet (EUV) lithography technology in delivering customer products to market in high volume.

The U.S. administration, according to sources, is readying a maximum limit wherein U.S. technology cannot account for more than 10 percent of products supplied to Huawei. As of now, of the chips manufactured by TSMC, the 7-nm variety contains only 9 percent U.S. technology or parts, and will remain unaffected by the proposed US sanction, if at all implemented. However, the company’s 14-nm semiconductors are claimed to contain 15 percent of US technology, and thus may face a problem from the sanctions. 

TSMC experts currently have sidelined the news and have denied commenting on the hypothetical claims. There has also not been an official statement put up by the U.S. administration on the proposed sanctions and it remains to be seen if at all such restrictions come into place. In the event the U.S. does goes ahead with its plans, Huawei would have to either choose to buy 14-nm chips from China’s Semiconductor Manufacturing International Corporation (SMIC) or switch to 7-nm or 5-nm products from TSMC, claim reports.

Facing the burns of the on-going US-China trade war for some time now, Huawei, on the other hand, has emerged as the No. 2 smartphone brand worldwide and the biggest maker of switching gear at the heart of phone networks. The Chinese telecom equipment maker has been pouring money into research that reduces its need for American suppliers, and is now at the forefront of 5G technology deployments. According to a recent report, with $107 billion in 2018 sales, Huawei spent 100 billion Yuan ($15 billion) on research and development last year, more than Apple or Microsoft.