In mid-May, the US government extended the ban on Huawei for another year. Additionally, it also announced new rules, which require chipmakers using US technology to apply for a license to ship chips to Huawei and other banned entities. At around the same time, a report revealed that TSMC had stopped taking new orders from the Chinese telecom giant. Now, after two months, the same has been officially confirmed by TSMC.
TSMC (Taiwan Semiconductor Manufacturing Company) is the world’s largest chipmaker. It is known for manufacturing chipsets for major firms like Apple, Qualcomm, Huawei, MediaTek, NVIDIA, Broadcom, ADI, NXP, and others.
Huawei accounted for 23% of the revenue generated by TSMC in 2019. However, still, Mark Liu, the chairman of the company confirmed in an investors conference held on July 16 that they did not take any new orders from Huawei since May 15 in compliance with the new US regulations.
Though TSMC could apply for the required license to ship chips to Huawei, it’s very unlikely to happen. Anyway, the Taiwanese company is allowed to ship the older orders prior to the new rule before Septemeber 14 when the grace period of three months will end.
Interestingly, TSMC still forecasts $11.2 billion to $11.5 billion for Q3 (July-September), which is 20.7% more than last year. Additionally, the company increased its revenue growth target to over 20% for 2020 and even increased its capital expenditure to up to $17 billion, from the previously planned $15 billion to $16 billion
The ongoing rollout of 5G products and high-performance computers have helped TSMC to remain unaffected despite losing one of its biggest clients whose void is already being filled by other companies.
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(Source)
