Economy

The US stopped Huawei's latest $700 million order to TSMC

The US stopped Huawei's latest $700 million order to TSMC”

Friday's move by the US Commerce Department expands US authority to require licences for sales to Huawei of semiconductors made overseas with US technology, vastly extending its reach to halt sales to the world's second-most popular smartphone maker. In addition, only 1% of its components are from the U.S. This is quite a huge drop from 11% in the Mate 30 4G version.

The addition to the blacklist means US companies who seek to export components to Huawei, or any of its affiliated companies, have to obtain a license.

"China is prepared to impose restrictions on or launching investigations into US tech companies like Qualcomm, Cisco and Apple in accordance with Chinese laws like the Cybersecurity Review Measures and Anti-monopoly Law, and suspending the purchase of Boeing airplanes", the editorial declared.

"Every electronics system that Huawei produces could be negatively impacted", Jim Handy, semiconductor analyst for Objective Analysis, said in an email.

New curbs announced Friday are the third round of sanctions aimed at cutting off Huawei's access to US technology and markets. "Ultimately, this will harm USA interests", Huawei said in a statement, adding that the decision was "arbitrary and pernicious, and threatens to undermine the entire industry worldwide".

The potential move, the second time within two days that China has released a message of hitting back against the United States, also the very first time government source noted to target specific USA companies, is a result of a spat between the two countries regarding the origin of the deadly coronavirus.

Washington's decision drew condemnation from Beijing, which regards Huawei as a national champion because of its success in dominating global networking technology.

And as with all Chinese companies, Huawei must hand over intelligence information to Beijing if requested, in accordance with China's National Intelligence Law.

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The potential impact extends far beyond Huawei.

"We have serious questions as to how this project takes into consideration national security requirements and how it aligns with a broader strategy for building a diverse USA semiconductor manufacturing supply chain", the lawmakers wrote.

Guo said that Huawei spent about $18.7 billion previous year buying from US suppliers.

Huawei declined to comment on the matter while TSMC called them "purely market rumors".

Hard. In a move that made last year's ban from its US supply chain seem like a pat on the back, the USA changed an export rule that now requires any global foundry using US technology to obtain a license before shipping chips to Huawei. The company can keep using Google's Android operating system on its smartphones but lost the ability to pre-install music, maps and other Google services customers expect on phones. About 40% of the capital raised, or almost 8 billion yuan, would be used for SMSC to increase production capacity, the company said at the time. The report says that the rejected $700 million order from Huawei was for its 5nm and 7nm chips, which could be the upcoming Kirin 1020 and the current 5G baseband chips, respectively. But its biggest producer, SMIC, can only make chips that are two generations behind TSMC.

It was the company's first response to US moves to cut it off from global chip supplies. "But SMIC can probably manufacture earlier-generation Huawei chipsets".

Then-chairman Eric Xu warned in March that more US pressure on Huawei might provoke Chinese retaliation that could disrupt its global industry.

Speaking to Forbes he said: "The threat is legitimate, given the murky links between Huawei and Chinese authorities". "It will have a serious impact on a wide number of global industries" by creating uncertainty in the chip sector and technology supply chains.



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