Huawei won't get any more TSMC chips after September

mongeese

Posts: 411   +63
Staff member
In brief: American legislation against Huawei has spread from locking the company out of the US to cutting it off from new advancements altogether. A recently enacted law will require any company that uses American tools or designs to apply for a license to sell to Huawei, which appears to extend to multinational TSMC. The Taiwanese manufacturer previously constructed the majority of the processors and cellular equipment used in Huawei devices.

TSMC chairman Mark Liu announced at an investor’s conference that TSMC is complying with new US legislation, and did not take any new orders from Huawei after May 15. Their final shipment to Huawei will have been completed by September 14. He didn’t say if TSMC will apply for a license, but did indicate that they've already secured customers for Huawei’s previously reserved portion of production capacity.

TSMC does not expect the new legislature to inflict them much harm. Development into 7nm, 5nm, and 3nm technologies has yielded multitudes of eager new customers. AMD and Nvidia will utilize TSMC for large batches of upcoming products. Apple is also reportedly interested in partnering with TSMC to manufacture upcoming ARM products for Mac. And although mobile sales are down, the need for expensive 5G equipment is expected to increase sales in that sector, too.

Huawei’s outlook is not as rosy. TSMC manufactured several billion dollars’ worth of equipment for Huawei every year, including the Kirin processors that are in all their smartphones. Huawei has very few places they can turn to for processor manufacturing, because they’re similarly cut-off from Intel, Samsung, and GlobalFoundries. Unless one of these companies can attain a license, Huawei will be reliant on smaller Chinese foundries that are likely, in the near future, to struggle to catch up to the advancements made by bigger competitors.

In May, it was revealed that Huawei had spent $23 billion on stockpiles of “essential components,” that included a huge number of processors and other types of chips. Huawei will likely have enough equipment to keep sales ticking over for a year or two. If they don’t find a solution by then, they’ll start teetering off the edge of profitability.

Image credit: Karlis Dambrans, Ascannio

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QuantumPhysics

Posts: 3,474   +3,313
China is not dependent on the US or Taiwan.

CHINA will do just fine without either.

China has dominion over Asia and Southeast Asia - and many would argue South America and Africa.

But it shouldn't come to this. Trump's trade war is anti-free market and Americans are quickly going to realize that America outsourcing inflation to China in exchange for manufactured goods was allowing Americans to live a quality of life their productivity did not justify.

Simply shifting production to impoverished people in India or anywhere else isn't changing the basic facts.

America's going deeper and deeper in debt and isn't productive.

$30,000,000,000,000 in debt by the end of Trump's presidency.
 
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candle_86

Posts: 539   +443
China is not dependent on the US or Taiwan.

CHINA will do just fine without either.

China has dominion over Asia and Southeast Asia - and many would argue South America and Africa.

But it shouldn't come to this. Trump's trade war is anti-free market and Americans are quickly going to realize that America outsourcing inflation to China in exchange for manufactured goods was allowing Americans to live a quality of life their productivity did not justify.

Simply shifting production to impoverished people in India or anywhere else isn't changing the basic facts.

America's going deeper and deeper in debt and isn't productive.

$30,000,000,000,000 in debt by the end of Trump's presidency.
But China is, we've cut them off from advanced technology and until they are ready to play nice in global trade I see no issue further restricting their regime.
 

OneSpeed

Posts: 407   +200
Huawei will find a domestic supplier, albeit less advanced than the chips they currently get from TSMC. A little patience here and a little copyright infringement there; they'll be back in business, toot-sweet.
 
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yRaz

Posts: 3,386   +2,921
China is not dependent on the US or Taiwan.

CHINA will do just fine without either.

China has dominion over Asia and Southeast Asia - and many would argue South America and Africa.

But it shouldn't come to this. Trump's trade war is anti-free market and Americans are quickly going to realize that America outsourcing inflation to China in exchange for manufactured goods was allowing Americans to live a quality of life their productivity did not justify.

Simply shifting production to impoverished people in India or anywhere else isn't changing the basic facts.

America's going deeper and deeper in debt and isn't productive.

$30,000,000,000,000 in debt by the end of Trump's presidency.
I'm not okay with my stuff effectively being made with slave labor. China is the biggest threat to the sovereignty of the free world since the Soviet Union during the cold war. That isn't Trump talking, I've believed that since the 90s.

If the free market means human rights violations then you can take it and shove it.
 

yeeeeman

Posts: 331   +278
Nail in the coffin of USA, maybe.
This move will do one thing and it is the exact opposite of what it was intended to do.
It will move China from dependency to self development. SMIC is already at 7nm and being funded by the government, it means it has almost an unlimited amount of money to make things a reality.
Also, China has x86 license thanks for Via in the name of Ziaoxin.
Don't forget also that China is one of the most important markets nowadays for US companies and if China says f*** you US, like you f***ed us, then US will have even more to lose than what China lost with the ban.
Anyway, China was long overdue to become the world 1st economic power given they worked their asses off to fabricate all the things the entire world is using, meanwhile US has enjoyed eating and watching movies. It is natural that China will become no1.
 

yRaz

Posts: 3,386   +2,921
Nail in the coffin of USA, maybe.
This move will do one thing and it is the exact opposite of what it was intended to do.
It will move China from dependency to self development. SMIC is already at 7nm and being funded by the government, it means it has almost an unlimited amount of money to make things a reality.
Also, China has x86 license thanks for Via in the name of Ziaoxin.
Don't forget also that China is one of the most important markets nowadays for US companies and if China says f*** you US, like you f***ed us, then US will have even more to lose than what China lost with the ban.
Anyway, China was long overdue to become the world 1st economic power given they worked their asses off to fabricate all the things the entire world is using, meanwhile US has enjoyed eating and watching movies. It is natural that China will become no1.
The only reason China is the economic powerhouse that it is is that they treat their workers like slaves, they're essentially indentured servants being paid barely enough to live. And the rest of the first world looked the other way because of how profitable it is. I'd gladly pay an extra hundred dollars or more for a phone knowing it was manufactured in a humane way. The working conditions are so bad that some factories have suicide nets on their buildings.

It's time someone stands up to China and if you've been following what's been happening in the south China sea we are getting very close to war. And while trumps reason for hating China is very different from mine, his anti-China policy is indirectly making the changes I want to see.
 

Bulllee

Posts: 40   +16
Some fair comments here.
I love a good tech/politcal debate so here is my first broadside....
Firstly, Trump and his cronies picked another war to start:a tech war completely unwinnable.If someone let him play poker in one of his own casinos with a rigged deck and marked cards he would lose.
Secondly, the Chinese are very good at gambling,in fact they got better during the last two decades.
 

Eldritch

Posts: 254   +330
This is a huge blow for Huawei. It's already cut off from some of the best technologies, products and now some of the best manufacturing.
This drastically limits their options as now they have to make arrangements with others and they will not be able to bargain this time as they are cornered.
This business operates at razor thin margins with rapidly changing tech. Even if the Huawei products get bit more expensive or fall behind just a little bit then nobody will bother to buy their products.
 

Irata

Posts: 853   +1,209
TechSpot Elite
Some fair comments here.
I love a good tech/politcal debate so here is my first broadside....
Firstly, Trump and his cronies picked another war to start:a tech war completely unwinnable.If someone let him play poker in one of his own casinos with a rigged deck and marked cards he would lose.
Secondly, the Chinese are very good at gambling,in fact they got better during the last two decades.
China‘s strength is being able to think and plan several years ahead. Yes, the Soviet Union had five or ten year plans and we see how that went but I believe China is different.

I am mostly mad that the stupid greed of Wall Street gamblers with their fixation on short term quarterly numbers and also retailers‘ and consumers‘ greed for the extra buck has brought us to this unfortunate situation.

If someone wants to rectify this situation, looking at the Chinese side only will not do much good.
 

Evernessince

Posts: 5,402   +5,992
China‘s strength is being able to think and plan several years ahead. Yes, the Soviet Union had five or ten year plans and we see how that went but I believe China is different.

I am mostly mad that the stupid greed of Wall Street gamblers with their fixation on short term quarterly numbers and also retailers‘ and consumers‘ greed for the extra buck has brought us to this unfortunate situation.

If someone wants to rectify this situation, looking at the Chinese side only will not do much good.
Wall Street and big businesses got the ball rolling but America has changed to it's core.

I look at the way people are behaving nowadays and how people in general in the US have shifted and you can really see how much the country has rotted over the years.

It's funny, many games that once parodied Americans or America in general feel less extreme then what I see everyday. Go and play GTAV for example and just stroll around town. Many of the things that were supposed to be exaggerated sterotypes like the people or laws have become a reality.
 

Alex1105

Posts: 21   +18
Do not weep for Huawei, they thought of this and I can assure you they have found a way to cope.
Less billions of dolars sinking into american companies...we'll just wait and see how it evolves, because they already have the means and the manpower to manufacture all that was lost, and they're quite good at reverse engineering. And having a huge stockpile to reverse engineer from kinda helps with that, oh and did I mention the money?
 

Uncle Al

Posts: 7,474   +5,980
Huawei is just the tip of the iceberg. The intelligence agencies have been telling senior administration officials this for over two decades but until Americans are willing to pay a lot more for so many goods from China we won't see a change. Hard to believe that nobody has seriously looked to the other competitors that could take up 90-95% of the slack .....
 
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Bulllee

Posts: 40   +16
Huawei is just the tip of the iceberg. The intelligence agencies have been telling senior administration officials this for over two decades but until Americans are willing to pay a lot more for so many goods from China we won't see a change. Hard to believe that nobody has seriously looked to the other competitors that could take up 90-95% of the slack .....
There's no slack on that rope on my ship,stormy weather though.
 

Irata

Posts: 853   +1,209
TechSpot Elite
Huawei is just the tip of the iceberg. The intelligence agencies have been telling senior administration officials this for over two decades but until Americans are willing to pay a lot more for so many goods from China we won't see a change. Hard to believe that nobody has seriously looked to the other competitors that could take up 90-95% of the slack .....
Do they really need to pay a lot more though ? I have a feeling that most of the savings from cheaper Chinese manufacturing is padding companies‘ profit margins.

Lower costs is just one part of this, though. It‘s also the manufacturing knowledge.

Speaking of this, Huawei makes some really nice phones and laptops. And afaik, their Ryzen based Matebook - which I own - was the first well built, properly configured and not gimped Ryzen based laptop.
 
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Squid Surprise

Posts: 3,440   +2,334
This is posturing... in the long run, the leaders will be those with the most important resource - HUMANS!

China has over a billion people - it's only a matter of time before they catch up to, then surpass the US...

Then, eventually, India will follow suit.

With advanced technologies and the internet, keeping things secret becomes almost impossible... so a smaller nation's reliance on superior tech (aka, the US) will fall by the wayside.

Many Europeans understood this decades ago - and united as the EU.... of course, the UK has thrown a monkeywrench into that... but the only hope to stay a "leader" in tomorrow's world is to have a large population.
 
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Reehahs

Posts: 964   +596
This is posturing... in the long run, the leaders will be those with the most important resource - HUMANS!

China has over a billion people - it's only a matter of time before they catch up to, then surpass the US...

Then, eventually, India will follow suit.

With advanced technologies and the internet, keeping things secret becomes almost impossible... so a smaller nation's reliance on superior tech (aka, the US) will fall by the wayside.

Many Europeans understood this decades ago - and united as the EU.... of course, the UK has thrown a monkeywrench into that... but the only hope to stay a "leader" in tomorrow's world is to have a large population.
Well put, it is almost like parallel processing.

I'm not okay with my stuff effectively being made with slave labor. China is the biggest threat to the sovereignty of the free world since the Soviet Union during the cold war. That isn't Trump talking, I've believed that since the 90s.

If the free market means human rights violations then you can take it and shove it.
I don't know what Kool-aid you are drinking, but people in glass castles shouldn't throw stones.

Every country has skeletons in their closet and some are still keen on delivering more.

Ask about the abducted citizen of Pittsburgh, where did they go missing?
 
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ColdSoup

Posts: 85   +176
Do they really need to pay a lot more though ? I have a feeling that most of the savings from cheaper Chinese manufacturing is padding companies‘ profit margins.

Lower costs is just one part of this, though. It‘s also the manufacturing knowledge.

Speaking of this, Huawei makes some really nice phones and laptops. And afaik, their Ryzen based Matebook - which I own - was the first well built, properly configured and not gimped Ryzen based laptop.
Businesses will not accept less profit, so yes you will have to pay more. Shareholders will also not accept lower earnings. I would dump any stock holdings in companies that willfully made less money.

Labor costs and cheap supplies are the major factors. The US is very good at advanced manufacturing, it's not a skill issue.
 

Edster

Posts: 55   +43
Is probably end of the line for Huawei as a flagship phone company.Reality is, the smaller foundaries probably can sustain chips for lower end phones, Africa, South America, most of Asia, are markets for that.

As for the US, yes, there is a fundamental difference between having a good advanced manufacturing, and the manufacturing capacity. America simply no longer has the capacity to manufacture to sustain its own consumerism needs because since the 90s, there is a push to foreign nations. There are trained people, but are there enough trained people.

What some people don't understand here is that China is actually a pretty high tech manufacturing nation now. A lot of the low tech level items, especially anything with textile, are made in countries like Bangladesh or Vietnam.


Actually in the long run humans aren't going to be deciding factor, if anything, it will increasingly become less of a factor because they are essentially liability as tech makes manual work obsolete. Tech that makes the tech is whats going to be what determine superiority; AI fighter jet pilots can already clean up the best of humans. A few humans are enough to produce thousands of PS5 per day today.
 
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Angga B

Posts: 94   +89
China has dominion over Asia and Southeast Asia - and many would argue South America and Africa.
The way you casually said this as if it was no problem at all, is really telling. Shame.

The world has wake up to your modus operandi, CCP, you may already corrupt many officials in many countries (inc the US and European) but rest assure the public would make sure you fail. Miserably.
 

Eldritch

Posts: 254   +330
I think discussion is very much derailed here and feelings are running high. Forget USA and China for a bit as they will be fighting each other for a very long time and look at it from the privacy angle.

Huawei has been flagged multiple times by multiple nations as security risk and is known to have backdoors installed in their devices and telecom equipment.
To say that this is simply due to USA trying to stop China is just amusingly naive.
We can see how allied countries who even laugh at USA for other proposals have taken this one very seriously and started blocking Huawei. This is a real and dangerous security threat and to just make it into a nationalistic Us vs Them issue is wilful ignorance.

How about we start holding companies who have become mass espionage tools to be responsible for their actions and stop defending them?
 

Ben1978

Posts: 82   +67
Huawei is just the tip of the iceberg. The intelligence agencies have been telling senior administration officials this for over two decades but until Americans are willing to pay a lot more for so many goods from China we won't see a change. Hard to believe that nobody has seriously looked to the other competitors that could take up 90-95% of the slack .....
The efficiencies would be lost by switching elsewhere. No country on Earth can provide such a pool of skilled cheap labor working within an efficient economy. Plus robots are now taking over in a lot of Chinese factories. Not the clothing ones where millions of small factories meet orders for textiles, but in the high tech factories like those Huawei runs.