Report: TSMC's Reducing Its Reliance on Huawei Amid US Government Scrutiny

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Huawei might need to find a new chip supplier. DigiTimes today reported that TSMC is "reducing its chip capacity support for Huawei," one of its biggest clients, "to avoid relying too much on Huawei's orders" due to increased U.S. government scrutiny.

We probably don't need to recap all of the conflicts between Huawei and the U.S. government over the last few years. Perhaps the most important bit was the U.S. Department of Commerce adding Huawei to the Entity List in May 2019, which made it more difficult for the company to source equipment from its American suppliers.

The U.S. has reportedly pressured TSMC in recent months, too, because it fears that Huawei's proximity to China might lead the Chinese government to compromise its chips in an effort to enable mass surveillance. Reports also claimed the U.S. recently asked Taiwan to restrict chip exports (most likely from TSMC in particular) to Huawei.

TSMC has resisted the U.S. government's efforts thus far. That pressure's set to increase, however, with The Wall Street Journal reporting Monday that U.S. lawmakers have considered restrictions on the use of American chip-making equipment. Those new rules would reportedly seek to disrupt Huawei's chip supply.

DigiTimes said this has placed TSMC in a tough situation. It's "still working closely with Huawei in the development of advanced 5nm and 3nm chip solutions," according to the outlet's anonymous industry sources, but it's also freeing up some chip supply because "its business with Huawei contains certain political risks."

Distancing itself from Huawei isn't likely to hurt TSMC's business too much--plenty of companies, like AMD and Nvidia, are willing to buy those chips. But the arrangement could make it harder for Huawei to source the chips it relies on; we suspect the company will push even harder for China's semiconductor industry to mature enough to handle its needs.

Nathaniel Mott
Freelance News & Features Writer

Nathaniel Mott is a freelance news and features writer for Tom's Hardware US, covering breaking news, security, and the silliest aspects of the tech industry.

  • bit_user
    Reading stuff like this just gives me the feeling that Trump is playing with fire (and we might all get burned).