TSMC Keeps Mum Over Huawei Licence Amid Rising Demand For Chips On 5G Smartphones, Mobile Networks - TheStreet

TSMC Keeps Mum Over Huawei Licence Amid Rising Demand For Chips On 5G Smartphones, Mobile Networks

TSMC's chief executive described as 'unfounded' recent reports that the company was granted a licence by the US government to continue supplying chips to Huawei The world's largest dedicated chip foundry has been the contract chip maker for HiSilicon, Huawei's semiconductor design unit
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TSMC Keeps Mum Over Huawei Licence Amid Rising Demand For Chips On 5G Smartphones, Mobile Networks

Taiwan Semiconductor Manufacturing Co (TSMC), the world's largest contract chip maker, said on Thursday that it did not ship any products to Huawei Technologies after September 15, when new US trade restrictions on the Chinese telecommunications giant took effect.

TSMC chief executive C C Wei declined to comment on speculation that the company has applied to the US government for a licence to continue supplying chips to Huawei, the world's largest telecoms equipment maker and China's biggest smartphone vendor.

"We don't want to comment on our [licence] status right now," said Wei during the company's September earnings conference call on Thursday. "We noticed that there is a report saying TSMC got a licence. We are not going to comment on this unfounded speculation."

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On August 17, the Bureau of Industry and Security under the US Department of Commerce further restricted access by Huawei and its non-US affiliates on the government's Entity List to items produced in the US and abroad if they were made with American software and other technology.

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Washington requires foreign chip makers that use US technology, including Taiwanese suppliers TSMC and MediaTek, to apply for a licence to sell chips to Shenzhen-based Huawei. It essentially chokes off Huawei's ability to acquire any off-the-shelf chips developed or produced using US technology.

Recent Chinese media reports, however, said TSMC has been granted such a licence by the US Commerce Department. TSMC has been the contract manufacturer of integrated circuits (ICs) designed by HiSilicon, Huawei's semiconductor unit.

Huawei declined to comment on Thursday.

The Trump administration's latest restrictions on Huawei further complicates the battleground in the US-China tech war, which has widened from semiconductors and 5G mobile networks to apps and cloud services in recent months.

Earlier this month, Semiconductor Manufacturing International Corp (SMIC), mainland China's biggest chip maker, said its US suppliers have been issued with letters telling them they are subject to additional export restrictions.

That has put further pressure on Huawei's efforts to find alternative sources of silicon components. In September, SMIC applied with the US government to continue supplying Huawei, according to a report by state media outlet Beijing News.

TSMC's Wei said on Thursday that the company was still evaluating the global supply chain implications impact of US restrictions on SMIC. He expects TSMC will be busy meeting global demand for chips used on 5G smartphones and mobile networks.

Many analysts, however, see the export restrictions on SMIC as benefiting other dedicated chip foundries led by TSMC, which controls more than 50 per cent of the world's US$60 billion contract chip manufacturing market.

"We now see IC makers searching for a second foundry source to alleviate the potential risk of SMIC being cut off [from the supply chain]," said Eric Tseng, chief executive of Taiwan-based semiconductor research firm Isaiah Capital & Research. He indicated that TSMC, United Microelectronics Corp and US supplier GlobalFoundries may win more orders in the upcoming quarters.

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