Huawei: TSMC no longer delivers chips

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Huawei still seems to be one of the US’s favorite destinations, or Donald Trump’s favorite destination. We reported a few days ago that Huawei will have to forgo the pre-installed Google services for at least another year. This makes Huawei sensitive in western markets, where smartphones without Google simply have a huge problem.

However, the US government relented on May 15 and also turned Huawei’s tap on chip production. As you can read here, the US government has also made explicit comments about Huawei here, since no name of a Chinese company was mentioned in the previous order.

The U.S. government has now adjusted the guidelines for companies on the notorious “blacklist” to make it almost impossible for Huawei to purchase processors and similar products, provided that production is made using technology from U.S. manufacturers. TSMC is such a company, because the Taiwan Semiconductor Manufacturing Company, like many other producers, uses manufacturing equipment made in the USA and is therefore in fact no longer allowed to supply Huawei without a corresponding license.

This now has a direct effect on China’s smartphone heavyweight, as Nikkei reports. Existing orders may still be executed, it says, but new orders for upcoming smartphones are no longer required. Huawei is TSMC’s second-largest customer, after Apple, where it not only obtains its SoCs for smartphones, but also chips for AI and network technology.

Huawei itself then immediately knocked out a rather angry announcement, in which one speaks of the “stranglehold” of the US government, which is now becoming even firmer. Huawei also states in its statement that the Us is affecting not only Huawei but the global industry, and that this new directive has an impact on the “global industry in many industries” and thus has an impact “on the expansion, operation and maintenance worth hundreds of billions of dollars in more than 170 countries.

If you want to know my personal opinion on this, I am inclined to fully agree with Huawei here. A Taiwanese company, prompted by the U.S. government, is not allowed to supply a Chinese company with chips for smartphones that are essentially sold outside the United States. I could not understand the previous directive, because the Us still owes the proof that Huawei and its technology are indeed a threat to national security, as the US continues to claim. But how a smartphone that is neither produced in the USA nor sold and used in the USA threatens US security, I would like to be explained first.

I also fear that this will have a huge impact on many branches of the United States, as we can assume that China will consider a response that is likely to be similarly inappropriate and will most likely aim to make it more difficult or even impossible to sell the Apple iPhone in the Chinese market.

This is setting in motion a spiral in which we cannot yet foresee what impact this can have on the global economy , at a time when the world economy could use any positive stimulus.

But what’s next for Huawei? It is possible that this is an opportunity for other players, such as the European chip manufacturer STMicroelectronics, with whom Huawei has been working for a long time and is now exploring the extent to which this partnership can be expanded.

I cannot foresee how the situation will develop in the medium term, but I naturally fear difficulties for Huawei in the foreseeable future, but these may also extend to other companies. Huawei will try to deal with the situation, and that could ultimately be dangerous for the US government or for US industry: if Huawei finds a viable way of selling smartphones globally. So is Trump opening the Pandora’s box here? Let us wait and see what the next few months will bring. In any case, I find it dangerous for a state to be able to interfere in the work of companies to such an extent on the basis that they use US technology in their plants. What do you mean: Is itis Huawei destroyed, or are the US shooting the most fatal own goal in recent tech history?

Sources: Nikkei, Huawei on Twitter, via WinFuture.de and Golem.de

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