TSMC has halted new orders from Huawei in response to new US export controls

nanoguy

Posts: 618   +9
Staff member

The Taiwan Semiconductor Manufacturing Company (TSMC) has officially halted new chip orders from Huawei after the US introduced tighter export rules for suppliers that make use of American technology to manufacture hardware or license software for Chinese companies.

The move is a hard blow for Huawei, who depends on TSMC to make most of the chips designed by its HiSilicon subsidiary and are essential for its devices. Huawei chairman Guo Ping admitted in a press statement that he expects the company's business will "inevitably be impacted," and noted that by attacking a "leading company from another country," the US acted against the interests of Huawei's customers and several global industries.

Guo further explained that "in its relentless pursuit to tighten its stranglehold on our company, the US government has decided to proceed and completely ignore the concerns of many companies and industry associations. [...] This new rule will impact the expansion, maintenance, and continuous operations of networks worth hundreds of billions of dollars that we have rolled out in more than 170 countries."

Last year, Huawei bought $18.7 billion worth of hardware and software from US suppliers, who have been doing their best to go around the export rules.

Recently, there have been reports that China would retaliate against the new rules from the US Commerce Department that affects the supply chain of local companies. However, TSMC told Reuters they were "purely market rumor," while Chinese state investors have committed $2.2 billion towards Shanghai-based Semiconductor Manufacturing International, effectively securing a 50.1 percent ownership.

Richard Yu, who directs Huawei's consumer division, wrote on WeChat that "the so-called cybersecurity reasons are merely and excuse" and that the latest move to block suppliers is a reaction to "the threat to the technology hegemony of the US."

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Axil00

Posts: 41   +45
I don't know what they expected? China has blatantly stolen valuable tech IP for decades now. The current administration has been trying to hammer out a deal for years now.

If you refuse the carrot enough times you're eventually going to get whacked with the stick.
 

Evernessince

Posts: 5,461   +6,133
They shouldn't have been shipping U.S. technology to Iran, and they wouldn't be in this trouble.
While true, making a statement like this, as if they do it on a regular basis, has no foundation on any factual evidence revealed thus far.

https://www.reuters.com/article/us-...ing-prohibited-u-s-gear-to-iran-idUSKBN20P1VA

I don't know what they expected? China has blatantly stolen valuable tech IP for decades now. The current administration has been trying to hammer out a deal for years now.

If you refuse the carrot enough times you're eventually going to get whacked with the stick.
What carrot? The administration made unilateral moves, there was no negotiations, only "I'm taking this away, agree to our demands or we will take away more".

That's not negotiations, that's ransom. It's been almost 4 years and relations have only gotten worse.
 

Irata

Posts: 987   +1,466
TechSpot Elite
This seems like a dangerous move long term as it shows to anyone - not just the Chinese - that as long as you use anything made / designed / managed in the US, the US govt can essentially dictate how you do business and with whom, regardless of where you are located.

I fear that long term this may be a pyrrhic victory.
 

Nobonita Barua

Posts: 62   +52
This seems like a dangerous move long term as it shows to anyone - not just the Chinese - that as long as you use anything made / designed / managed in the US, the US govt can essentially dictate how you do business and with whom, regardless of where you are located.

I fear that long term this may be a pyrrhic victory.
Specially being a country that is overtly dependent on brain drain & outside talent for almost all kinds of science & technologies.

China can shed some money from those trillions they have & can gobble up nice chunk from Japanese core IP occupying over 40% of global semiconductor value chain .
I can see a competition starting here on EDA & OEM , something US has "monopoly" over with those 1980s established companies.
 
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grumblguts

Posts: 358   +306
Industrial espionage from china is huge.
allowing them to maintain access to private data would be *****ic.
In the UK their allowing china to build 2 nuke power stations. How more *****ic can you get
 
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Axil00

Posts: 41   +45
What carrot? The administration made unilateral moves, there was no negotiations, only "I'm taking this away, agree to our demands or we will take away more".

That's not negotiations, that's ransom. It's been almost 4 years and relations have only gotten worse.
The "carrot" is continued access to the to american industry critical to their economy. I could see how this could be considered ransom if you believe our current relationship with China is anything approaching fair, but few on either side of the aisle believe that.

The tactics the administration has used to change this behavior are straight out of the Chinese playbook. We are now subsidizing American industries and weakening the ability for Chinese companies to compete via tariffs.

The administration's stance seems at a high level to be you can play the game our way, or we will play it yours. You can no longer expect us to give you access to all our markets, and let you pick and choose which of yours to open up, sell commodities at a loss, require our companies to give up thier IP and technology for access to the Chinese consumer, or have it stolen outright.

Free trade is only possible when both sides commit to it. Prior to Trump American companies weren't competing against Chinese companies they were competing with the Chinese government.

China has responded to efforts to change the situation as they always have. Slowing the process down as much as possible waiting for the other side to lose the will continue. It may well work, but I applaud Trump's decision to make this a priority and sincerely hope that whether he wins or Biden takes over we stay the course.
 

mbrowne5061

Posts: 1,687   +960
This seems like a dangerous move long term as it shows to anyone - not just the Chinese - that as long as you use anything made / designed / managed in the US, the US govt can essentially dictate how you do business and with whom, regardless of where you are located.

I fear that long term this may be a pyrrhic victory.
This has literally always been the case though. ITAR and EAR are nothing new, and most companies and countries have absolutely no issue complying with them because there usually are far fewer entities on the 'do not export our tech to them' list than there are off the list. Huawei was just the first large company to not only F-up this badly with their compliance, but then to double-down when they were caught. The fact that there was no leadership change at Huawei through all this also tells me that the CCP is at least tacitly OK with the behavior of Huawei.
 

candle_86

Posts: 578   +502
This seems like a dangerous move long term as it shows to anyone - not just the Chinese - that as long as you use anything made / designed / managed in the US, the US govt can essentially dictate how you do business and with whom, regardless of where you are located.

I fear that long term this may be a pyrrhic victory.
No these rules have existed since at least the Soviet Union was a threat. Look at countries buying f16's and f35's, they know they can't resell them to other states, they also don't get the same avionics that is shipped in the American version, yet countries buy them. The reason is of course because they are great at their roles. No different in technology, the us government could just as easily forbid export of x86 microchips to China, or ban Microsoft from shipping windows, they could even order steam to exit the Chinese market. We did the same thing with Iran and Venuzuala
 

Irata

Posts: 987   +1,466
TechSpot Elite
This has literally always been the case though. ITAR and EAR are nothing new, and most companies and countries have absolutely no issue complying with them because there usually are far fewer entities on the 'do not export our tech to them' list than there are off the list. Huawei was just the first large company to not only F-up this badly with their compliance, but then to double-down when they were caught. The fact that there was no leadership change at Huawei through all this also tells me that the CCP is at least tacitly OK with the behavior of Huawei.
Sorry, but so far I have not seen any proof of Huawei doing...well, all those things they have supposedly done. Maybe there needs to be a Chinese Snowden, who knows...

Now, I am not naive wrt China but the problem for me is that the US govt is forcing foreign companies to ask „how high“ when they say jump just because. Now it‘s Huawei and China, before it was Iran (who adhered to the agreement), who says it‘s not Mexiko or France next (remember, European cars were declared a threat to national security) as no proof seems to be needed.

This is where the „pyrrhic victory“ part comes in. Besides making the wrong people look like the good guys, it may make companies worldwide think twice before using anything made in the US.

Imho, that would be a bad outcome.
 

Irata

Posts: 987   +1,466
TechSpot Elite
No these rules have existed since at least the Soviet Union was a threat. Look at countries buying f16's and f35's, they know they can't resell them to other states, they also don't get the same avionics that is shipped in the American version, yet countries buy them. The reason is of course because they are great at their roles. No different in technology, the us government could just as easily forbid export of x86 microchips to China, or ban Microsoft from shipping windows, they could even order steam to exit the Chinese market. We did the same thing with Iran and Venuzuala
This is about a Taiwanese company not being allowed to manufacture chips for a Chinese company using Dutch equipment.
 

GeforcerFX

Posts: 970   +453
No these rules have existed since at least the Soviet Union was a threat. Look at countries buying f16's and f35's, they know they can't resell them to other states, they also don't get the same avionics that is shipped in the American version, yet countries buy them. The reason is of course because they are great at their roles. No different in technology, the us government could just as easily forbid export of x86 microchips to China, or ban Microsoft from shipping windows, they could even order steam to exit the Chinese market. We did the same thing with Iran and Venuzuala
All F-35s are the same kit and software avionics wise, the one exception is the F-35I which Israeli requested the ability to put there own avionic in. The F-35 is only sold to the closest of close USA military allies, they are willing to take the aircraft with the knowledge that they have no access to source code or the ability to fully maintain/upgrade the aircraft without USA involvement.
 

candle_86

Posts: 578   +502
This is about a Taiwanese company not being allowed to manufacture chips for a Chinese company using Dutch equipment.
Because they want to continue doing bussiness with American companies which makes the the lion share of their money.
 

mbrowne5061

Posts: 1,687   +960
Sorry, but so far I have not seen any proof of Huawei doing...well, all those things they have supposedly done. Maybe there needs to be a Chinese Snowden, who knows...

Now, I am not naive wrt China but the problem for me is that the US govt is forcing foreign companies to ask „how high“ when they say jump just because. Now it‘s Huawei and China, before it was Iran (who adhered to the agreement), who says it‘s not Mexiko or France next (remember, European cars were declared a threat to national security) as no proof seems to be needed.

This is where the „pyrrhic victory“ part comes in. Besides making the wrong people look like the good guys, it may make companies worldwide think twice before using anything made in the US.

Imho, that would be a bad outcome.
It is literally further up in this thread:


Huawei violated ITAR and EAR agreements with the US government. End of story.

If they were not already so large and integrated into the overall global supply chain already, they (or their executives) would have also been placed on the Entity List themselves over this.
 
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Danny101

Posts: 1,380   +541
Although I hate it for their populace, China had it coming. As it has already been said, they weren't playing fair and the chickens are coming home to roost. On the other side of that coin, America's leaders allowed it to develop this way and are far and away more responsible. China just took advantaged of what was given to them. I still don't want this trade war to turn into a hot one, so I hope some levity will come into play soon.