According to the Nikkei Asian Review, Taiwanese Semiconductor Manufacturing Co., the world’s largest contract semiconductor manufacturer, has stopped taking new orders from Huawei Technologies, one of its largest customers. Report says decision to comply with news Export controls to the United States, announced on Friday, aims to make it more difficult for Huawei to obtain chips produced using US technology, including manufacturing equipment.
Orders placed before the ban or already in production will not be affected if they can be dispatched before September 14. Huawei, the world’s largest manufacturer of telecommunications equipment, is TSMC’s second customer after Apple. TSMC manufactures many of the advanced chips used by Huawei, including its smartphones.
On Friday, the US Department of Commerce released new orders, which specifically target Huawei by making it more difficult for the company to create chips using American software and technology, even in foundries abroad.
On the same day as the Commerce Department’s announcement, TSMC announced the opening of a new state-of-the-art, $ 12 billion chip foundry in Arizona with support from the state and federal government. Once opened, the plant will allow more US TSMC customers to manufacture their chips nationwide.
TSMC’s announcement came after The Wall Street Journal reported that White House officials were in talks with TSMC and Intel to build smelters in the United States to reduce dependence on factories in Asia and the chain international supply.
In an email, a TSMC representative told TechCrunch that the company does not disclose customer order details. She added that TSMC complies with applicable laws and regulations and “closely monitors changes to the United States’ export rules” and “works closely with external advisers to conduct legal analysis and to provide review and full interpretation of these rules ”.
This is the latest restriction the U.S. government has placed on Huawei citing national security concerns. With ZTE, Huawei was identified as a potential security threat by the House Intelligence Committee in 2012.
The two companies denied the charges, but under the Trump administration, efforts by the U.S. government to prevent the two from doing business with U.S. companies have intensified. According to the Nikkei Asian Review report, Huawei has anticipated new orders from the Commerce Department and has accumulated a year of inventory of the chips needed for its telecommunications equipment.
TechCrunch contacted Huawei for comment.