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Technology Stocks : Taiwan Semiconductors (TSMC)

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From: mlc1785/21/2020 10:30:08 PM
   of 26
 
New Huawei Sanctions by U.S. Are Less Than Meet the Eye, Lawyers Say

May, 22, 2020

The most recent American government move to tighten restrictions on Huawei Technologies Ltd. will not hit the Chinese telecom equipment giant as hard as expected, according to several American export-control lawyers.

The new rules, unveiled by the U.S. Commerce Department Friday, expand the government’s authority to require foreign manufacturers using American chipmaking equipment and technology to obtain a license before selling chips to Huawei.

That will hit Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC), which supplies more than 90% of Huawei’s smartphone chips. TSMC uses American-made equipment to manufacture those chips.

But the rules apply only to chips designed by Huawei, lawyers said. Foreign chip manufacturers will still be able to sell chips to Huawei that are not custom-made for Huawei.

The company has reportedly already shifted part of its chip production from the Taiwan supplier to the Chinese mainland’s leading chipmaker Semiconductor Manufacturing International Corp. (SMIC), which recently secured funding from two state-owned funds to scale up production.

However, the new U.S. rule will also affect SMIC, as it relies on U.S.-made equipment to produce chips, and it is not clear whether the Chinese company would be able to gain a license to continue selling to Huawei.

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