Paul van Gerven
18 May

The US Friday announced new rules that require any chipmaker using US technology to get a license before they can sell to Huawei Technologies. In retaliation, Chinese media report that China is ready to start imposing restrictions on US companies, including Apple and Qualcomm.

The US put Huawei on a ‘blacklist’ last year, accusing the company of violating US sanctions on Iran and of spying on customers, among other things. While this imposed restrictions on what US companies could sell to the telecom giant, non-US chip manufacturers and other tech companies mostly continued their supply as usual. With the new license requirement in place, this will no longer be possible without risking US sanctions.

Caught right in the middle of this is TSMC. Huawei is one of its largest customers, but the foundry depends on chip-manufacturing equipment made in the US. Furthermore, TSMC generates more than half of its revenue from US orders.

Initially, hopes were raised that a deal had been hammered out that would allow TSMC to keep selling to ‘both sides’ when the foundry announced plans to construct its 12-billion-dollar 5nm fab in Arizona. The new license rules, the contours of which have been circulating for months, were announced shortly afterwards, however. TSMC told Reuters “it is following the US export rule change closely”.