TSMC: Our production line uses a lot of American equipment – we cant change in the short term


Taiwanese chipmaker, TSMC, is currently at the hub of the tussle between Huawei and the U.S. How did it come to this? After the initial ban by the U.S. which stops Huawei from doing business with American companies, Huawei did not fall. In fact, the company shipped 240 million smartphones in 2019 which is a record highest for Huawei. Do not let this figure surprise you. Most of Huawei’s sales are in China. Google Mobile Services and Google Play Store are technically useless in China anyway. This means that the U.S. ban changed nothing to Huawei’s business in China. However, outside China, there is a real challenge for Huawei.


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Earlier this year, the U.S., perhaps not satisfied with the impact of the ban on Huawei took another step. This time, the U.S. roped in foreign companies that make use of American technology. This means that any company that uses American technology must get a license before working for Huawei. The major target of this law is Taiwanese chipmaker, TSMC. Why? TSMC is the world’s largest foundry and it is responsible for Huawei’s Kirin chips. If TSMC can not work for Huawei, then the production of the Kirin chips will take a real hit.

However, there have been questions about how much American technology TSMC uses. Some have even suggested that TSMC should use alternative technologies for Huawei. Doing this is far from simple.

This morning, TSMC held an annual shareholders meeting at the Ambassador Hotel in Hsinchu City. Liu Deyin, chairman of TSMC, said that the TSMC production line uses a lot of American equipment and will not change in the short term. The emphasis here is on the phrase “a lot”. This implies that many corners of TSMC’s production process have a touch of “America”. As to whether TSMC can build a production line without American technology and equipment, he said “…we will find solutions and overcome the challenges one by one”. Nevertheless, this will not happen in the short term. 

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In all, the chipmaker is still hopeful that the U.S. restrictions will not affect its business with Huawei. When asked whether TSMC can fill the order gap left by Huawei HiSilicon, Liu Deyin said: “We hope that will not happen.” He also added: “It’s also difficult for me to predict how fast it will happen…But if it does happen, we will fill it in a very short time.”

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