TSMC on Thursday has confirmed that it had stopped processing new orders from Huawei back on May 15th. The news is the first official statement from the company on the matter, since the US Commerce Department’s expansion of rules to require licenses for sales to Huawei of semiconductors which us US technology.

Under the rule change, Taiwan based TSMC is not allowed to sell to Huawei silicon products unless the Chinese vendor receives (an unlikely) license from US regulators. Huawei and TSMC had been given a 3-months grace period in which existing orders were allowed to be processed and shipped. TSMC yesterday has confirmed that the manufacturer does not plan to ship any wafers to Huawei or HiSilicon after September 14th.

It’s been wildly speculated that Huawei had been pre-empting the US ban and making very large orders to TSMC to be able to have a sufficient silicon supply for the rest of the year. However, once this stock runs out and if the political situation hasn’t been resolved by then, it would mean big troubles for the Chinese vendor. Beyond Huawei’s consumer business segment which had grown to be the #2 smartphone vendor in the world, behind Samsung and ahead of Apple, Huawei is an important player in the cellular infrastructure market where they are currently the leading player for telecommunications equipment.

HiSilicon is also a big player in the DTV SoC market, IP camera SoC market, and most recently an entrant in the server CPU market with their in-house Kunpeng 920 chip and custom microarchitecture. Without means to manufacture their designs, it leaves the company in a precarious situation. Other semiconductor foundries are also unlikely to be able to pick up Huawei as a customer as they all use US-made equipment. In theory, even Shanghai based SMIC would be banned from supplying Huawei – in practice we haven’t heard any confirmation on the situation there yet.

As for TSMC, Huawei represented the manufacturer’s biggest customer with a 23% revenue share in 2019. Surprisingly enough, the company states that the Huawei ban is unlikely to have an effect on the company’s revenues, with other customers being able to pick up coveted manufacturing capacity. The company even forecasts 20% year-on-year growth for the July-September period, and is further increasing its capital expenditure for the year to up to $17bn.

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Source: Nikkei Asia

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  • tygrus - Friday, July 17, 2020 - link

    EUV requires a lot of power at the start because it looses so much along the way. It's very hard to convert a CO2 laser to EUV using vapourised droplets of tin. The mirrors and lenses absorb the EUV energy and so they need more cooling and don't last as long plus there's less EUV for the next mirror/lens so you increase the initial laser power causing more heat. The tolerances for 7nm FAB are so small, every little variation becomes a major issue. The 13.5nm EUV light fixes some limitations of 193nm light but creates a lot more problems. That's why it's taken longer as they improve or overcome the problems they found along the way. There's no free lunch.
  • soresu - Saturday, July 18, 2020 - link

    Optics that require polishing are an incredibly old technology, as in centuries old.

    The new metalens technology (metamaterial lenses) will completely displace the old optics paradigm in less than 2 decades, perhaps even significantly impact it in a single decade,

    Likewise companies that rely on the old optics paradigm for business will have to quickly adapt or fail - because metalenses can be mass produced just like etched silicon wafers.
  • Ian Cutress - Saturday, July 18, 2020 - link

    Not to be picky, but ASML does most of its manufacturing in Wilton Connecticut - the Dutch offices are where the R&D happens. You can bet your bottom dollar that having a factory in the US would be used against them and customers.
  • HyperText - Saturday, July 18, 2020 - link

    Actually, Veldhoven is the biggest R&D and manufacturing site of the company. Wilton is the second biggest.
  • brucethemoose - Friday, July 17, 2020 - link

    That depends on how good ASML's security is.

    Node shrinks are running out of steam anyway, so I wouldn't be suprised if SMIC and China stick to larger nodes, but shift towards advanced packaging and fringe technologies (photonics, silicon alternatives, etc).
  • Santoval - Friday, July 17, 2020 - link

    "Reverse engineering" does not require hacking the company, just "cracking" the machine itself and how it was designed, provided of course you have physical access to one. That is much more difficult than simply hacking them and stealing their designs but not impossible. Even if they had the complete design though that wouldn't guarantee they could build such a machine (in particular they would need to learn how to make its optics and its EUV light source).

    I agree that SMIC might choose to be more conservative, not moving beyond 14nm (that they already fab). They have already outlined plans for a "kind of 7nm" node (link below) though which does not require EUV at all. Per the article below they also have an EUV machine but "it has not been installed "reportedly because of restrictions imposed by the US". I have no idea how that might work, would an ASML employee be, er, required to guard the machine 24/7 to ensure it is not installed?
  • brucethemoose - Friday, July 17, 2020 - link

    AFAIK, it never shipped: https://www.reuters.com/article/us-asml-holding-us...
  • HyperText - Saturday, July 18, 2020 - link

    Without ASML support it is basically impossible to install a machine. There is no need for a guard.
  • brucethemoose - Friday, July 17, 2020 - link

    Also, I bet every intelligence agency in the world has agents sleuthing around Veldhoven now.
  • bigvlada - Friday, July 17, 2020 - link

    And the Germans "transferred" technology from UK in 19th century, alongside the Americans to fuel their technological progress. And the Japanese did the same after WW2. Americans "transferred" mother loads of German tech after WW2. They got radar, jet engine and some other bits from Tizzard mission (Their domestic efforts were stone age compared to the British). Nuclear know how from Italians and Germans.
    German tech was labeled as cheap crap from the east in 19th century. Japanese had the same treatment in the fifties. They gradually got better. So will the Chinese.

    Stealing tech, buying tech, reverse engineering tech has been done since the stone ages. Collective moaning of the Americans on the Internet about Chinese IP theft is getting embarrassing.

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