Trump administration has recently extended their ban on restricting Huawei from dealing with American tech companies until May 2021. Now, they are looking to deal the final blow by prevent Huawei from producing their Kirin series chipset.
Huawei currently produces its chipsets such as the Kirin 810, Kirin 980, Kirin 990 and Kirin 990 5G that are found on most of its products. Like Qualcomm, Nvidia and Apple, Huawei’s HiSilicon is a fabless semiconductor company and they rely on semiconductors from companies such as TSMC, Taiwan Semiconductor Manufacturing Co.
U.S is forcing TMSC to restrict their sales to Huawei
U.S Department of Commerce released the latest changes to their restriction, covering areas like restricting US-based software and technology that are being foreign-produced. This specifically covers semiconductor designs and chipsets produced by Huawei and its affiliate such as HiSilicon. It is reported that TSMC is working with its lawyers in the U.S to ensure how to interpret any new rules that may emerge over time.
TSMC to build semiconductor fab in U.S
Interestingly, before the new rules were revealed, TSMC had announced that it will be investing USD 12 billion to build an advanced semiconductor fab in Arizona, United States with the support by the US government.
The facility allows TSMC’s 5nm wafer fabrication technology with a capacity of producing 20,000 semiconductor wafer each month. The plant will create over 1,600 high-tech professional jobs.
But there are no assurance that TSMC would obtain a license to sell thier chips to Huawei. It is estimated that China accounted for 20% of TSMC’s global sales while 60% of sales are from the US.
Huawei to turn to SMIC
Huawei had anticipated further restrictions from the US government and they have gradually shifted some production from TSMC to Semiconductor Manufacturing International Corp (SMIC) that’s based in Shanghai. Although the move is seen as a motivator for Chinese companies to accelerate the development of home-grown technology, SMIC is seen as a second-tier manufacturer.
While TSMC is currently working on 5nm process technology, SMIC had only started to introduce 14nm tech in late 2019. There’s an obvious gap in skills and capability. Experts have opined that the latest Kirin chips can only be made by TSMC but they may outsource older Kirin chips to SMIC.
Huawei had recently introduced the Kirin 710A chip that’s manufactured by SMIC and it’s a derivative of the Kirin 710. It is still based on a 14nm FinFET process with a main frequency of 2GHz.
What are your thoughts?
A clear sign of bullying? Or you are skeptical of Huawei's involvement in the 5G infrastructure race, with U.S claiming the companies out there could provide covert access for Chinese intelligence collection, making secure data vulnerable?