Home BrandHuawei TSMC To Halt Supplying Chips To Huawei, Despite Making An Adequate 23% Of TSMC’s Sales

TSMC To Halt Supplying Chips To Huawei, Despite Making An Adequate 23% Of TSMC’s Sales

by Robin Sunny
TSMC and Huawei

Taiwan Semiconductor Manufacturing Co. or TSMC as it’s known by most people, recently confirmed that it has suspended processing new orders from one of its major customers, Huawei.

Although Huawei makes up for quiet a bit of TSMC’s sales, they stated that they would still be able to achieve more than 20% revenue growth this year thanks to the influx of high-performance computing applications and the strong demand for 5G smart phone infrastructure.

We are complying fully with the new [U.S.] regulations. We did not take any new orders [from Huawei] since May 15.

Although the regulation just finished its public comment period, the BIS [Bureau of Industry and Security] did not make a final ruling change. Under this circumstance, we do not plan to ship wafers [to Huawei] after Sept. 14.

TSMC Chairman Mark Liu

Due to the ‘Tightened’ export control rule, licences must be acquired by non-U.S. companies to utilise American technology and tools to supply to Huawei. Many other chipmakers like TSMC were made to deny new orders from the biggest Chinese Tech company after May 15 and to ship existing orders before September 14.

TSMC’s Forecast :

Whether the company plans to apply for licenses isn’t clear. According to their forecasts, its revenue for July-September could reach $11.2 billion to $11.5 billion, up more than 20.7% at the midpoint from a year ago, exceeding the market consensus of around $10.7 billion and said aid it will further increase capital expenditure to up to $17 billion this year.

The company’s revenue for April-June was NT$310.69 billion (New Taiwan dollar), or $10.38 billion, up 28.9% from a year ago, on the higher end of its forecast of up to $10.4 billion driven by the ongoing rollouts of 5G-related products and high-performance computers.

The company’s net profit surged 81% on the year to NT$120.82 billion, as the tech industry went through a rough 2019 that included weak iPhone demand in the first half and a normally slow second quarter.

This would be a big blow to Huawei, as TSMC is the primary manufacturer for Huawei’s HiSilicon division. And since TSMC has 50% of the world’s semiconductor market, it would be very hard for Huawei to find a new partner with the capacity of of TSMC. 

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