It wasn’t exactly a secret that the Trump administration hated Chinese tech companies like Huawei and ZTE. The first was on its way to achieving a long-held goal of becoming the world’s largest smartphone maker until Wilbur Ross and his Commerce Department ended those plans. Since 2012, Huawei was considered a threat to national security in the United States and, seven years later, was included in the List of Entities. This prevents the company from accessing its supply chain in the USA, including Google.
Huawei has managed to continue doing dynamic business and has even developed its own Huawei Mobile Services ecosystem. And earlier this year, it was actually the largest smartphone manufacturer on the planet for a brief period of time. The Trump administration realized that the List of Entities was small, and last year – exactly a year before the day it put the company on the List of Entities, the U.S. government kicked Huawei’s balls. By changing a certain export rule, the US was able to prevent foundries around the world from delivering cutting-edge chipsets to Huawei, including those that the Chinese company itself had designed (through its HiSilicon unit). These 5 nm Kirin 9000 chipsets were manufactured by the world’s largest contract foundry, Taiwan Semiconductor Manufacturing Co. (TSMC).
When it comes to providing the necessary chips for smartphones and all other technology products, TSMC is at the top, with Samsung Foundry in second. As the U.S. proved with Huawei, messing with TSMC can really do some damage to individual companies and the entire smartphone industry. Remember, after banning the sending of TSMC chips to Huawei, Huawei sold its Honor sub-brand, which should result in the delivery of 73% fewer Huawei devices this year. The manufacturer will cease to be the second largest appliance company in the world last year to the seventh this year, analysts estimate
China is unlikely to go after TSMC if it invades Taiwan
TSMC produces chips for some of the biggest names in technology, including Apple, Qualcomm (although Samsung is making the Snapdragon 888 chipset), the MediaTek ascendant and more. In fact, although TSMC’s customers are mostly factory-free (without a factory that produces chips), the company even received an order from Intel to manufacture some of the latter’s integrated circuits. Can you imagine the chaos and problems that would occur if TSMC were forced to stop producing chips for American companies like Apple and Qualcomm? According to the Seattle Times, something like this could happen if China felt the need to invade Taiwan. But there are those who believe that, even if such an invasion occurred, TSMC would be without hands, since China’s chip industry itself is several process nodes behind Taiwan’s.
Huawei is not allowed to receive the 5 nm Kirin 9000 chip that it designed
But that does not mean that China cannot find a way to improve its dying chip industry. It is feared that the country may resort to subterfuge and steal intellectual property from foundries such as TSMC. A Taiwan-based cybersecurity company called TeamT5 has detected an increase in the number of cyber attacks on the Taiwanese chip industry. While it is not clear whether these attacks come from hackers on behalf of China, “they are all attacking Taiwan’s semiconductor industry,” said T5 cyber threat analyst Shui Lee. In 2018, TSMC was the target of an attack ransomware.
Joerg Wuttke, president of the EU Chamber of Commerce in China, told Bloomberg Television that “this is going to get to the point where, in fact, because of export controls, because of government intervention, there will suddenly be disruptions in the supply chain. supply, not just due to capacity problems, so it’s better to prepare. “To do this, countries like the United States and Europe need to work to become self-sufficient. TSMC and Samsung is planning to build facilities in the United States. The TSMC plant in Arizona may be ready to produce 5 nm chips by 2023. Samsung is studying the construction of a factory in Austin, Texas. In 2023, the facility could be manufacturing 3 nm chips.