TSMC’s company chairman said at an annual general meeting Tuesday that it could quickly replace client Huawei if the U.S. federal government's ban on selling to the Chinese company’s chip division goes through, according to Reuters (opens in new tab).
This, in turn, means that TSMC might be planning to fight to keep Huawei, and that its spot could still be unclaimed.
This news comes on the wake of a continued trade war between the U.S and China, during which the U.S. blacklisted Huawei (opens in new tab) over supposed security concerns with the Chinese telecommunications company. This prevented domestic companies from shipping to Huawei without a specialized license, but recently the U.S. sought to expand the Huawei ban to foreign companies by requiring any foreign manufacturers who use U.S. chipmaking equipment to also acquire a license before supplying to Huawei.
The new foreign Huawei ban is set to take effect within 120 days (opens in new tab), which leaves companies scrambling to either adjust or gain leniency. TSMC, for instance, is now working to open a 5nm fab in Arizona, which could strengthen ties with the U.S. government enough help get its Huawei ban lifted.
Speaking about the potential of losing Huawei as a company, TSMC Chairman Mark Liu said “We hope that won’t happen,” Reuters reported. Should the ban go into effect, Liu reassured, “If it does, we will replace it in a very short time.”
That’s interesting news for the chip market, since the possibility of a gap existing implies that AMD or Apple has not laid claim to the capacity already.
This could be because of TSMC’s hopes to keep Huawei as a client. According to Reuters, the company is still considering the possibility of applying for an exemption. Still, that doesn’t rule out that the manufacturer might be negotiating with other companies behind the scenes just in case.
Huawei is currently TSMC’s second largest client behind Apple, with Nikkei Asian Review claiming that it accounts for 15-20% of the company’s annual revenue. Being able to lay claim to that order gap could mean far more supply for companies like AMD or could relate to Apple’s plans to have TSMC develop new Arm-based chips for them.