The US has been looking for ways to further stifle Huawei’s business by persuading its allies to also sanction the Chinese tech giant. It is also trying to enforce trade restrictions on Huawei via foreign companies and it may have just won if the report that TSMC is cutting down its chip support for Huawei is true.
According to Digitimes, TSMC has begun reducing its chip capacity support for Huawei. TSMC manufactures chips for several clients including Huawei, Qualcomm, and Apple.
TSMC is able to cut Huawei’s chip supply based on an alteration to the Foreign Direct Product Rule which governs products made by foreign companies using American technology. The Taiwanese semiconductor company is reported to use American technology for its chip production and will, therefore, require a license from the US to be able to supply Huawei.
The rule applies to any company that uses American technology, and it is claimed that no Chinese company, that Huawei may decide to contract its chip manufacture to if it ditches TSMC, uses Chinese-only technology.
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