The Trump administration finally decided to implement the plan also isolate Huawei from foundries of microprocessors we told you about a couple of months ago. In concrete terms, foundries that use American machinery and technologies (almost all the most advanced and famous ones) will have to obtain special licenses by the U.S. Department of Commerce to do business with the Chinese giant. The law is effective today, but an initial grace period of 120 days is expected.
The decision comes a few hours after a series of other, strongly correlated news items that make the vision perfectly clear "America first"by Trump. In the past 24 hours, we have told you that:
The Commerce Department spokesman said a Reuters:
This action puts America, American companies and American national security first.
Huawei is TSMC's second largest customer worldwide, behind only Apple in terms of turnover. The Taiwanese foundry produces the majority of HiSilicon Kirin SoCs found in Huawei smartphones. The Chinese giant has already set in motion some plans to run for cover gain their independence by relying on Chinese foundries such as SMIC; which however are much less advanced than international competitors. SMIC has just started producing its first HiSilicon SoC, and it is a Kirin 710A made with the 14nm FinFET production process. Not only was the original Kirin 710 made by TSMC at 12 nm, but the Taiwanese is practically ready with 5 nm. It is an abysmal gap.
The Commerce Department formally presents the new law as a kind of extension / extension / complement of the Ban. Secretary of Commerce Wilbur Ross told Fox News that in the original Ban there was "a very technical loophole through which Huawei was actually able to use American technology from foreign foundries". The new measure "is a highly tailored thing to try and close that loophole."
All the details of the provision are not perfectly clear, especially those crucial for understanding how the situation will evolve in the short term. In other words: Huawei currently has open contracts for the production of several 7-nanometer latest generation SoC, including the Kirin 990 that are found on board the latest top-of-the-range smartphones and tablets (like the P40 Pro you see above). If the same modus operandi of the original Ban is followed, it is likely that the existing contracts will be satisfied, but that Huawei will no longer be able to commission the creation of new SoC models. For now, however, we want to reiterate it, it is speculation, and it is good to wait for official indications.
BEIJING AND TSMC'S RESPONSE (HUAWEI IS NOW SILENT)
The response from the Beijing government was not long in coming. The Global Times reports that China is ready to include American companies such as Apple, Qualcomm and Cisco in an "unreliable entity list", which could lead to the start of investigations depth and the imposition of restrictions to the detriment of the companies involved. The same newspaper, which is government-owned and reflects its opinion, also says that the newspaper may also be imminent suspension of the purchase of aircraft from Boeing.
TSMC said it was observing the situation very carefully and that the legal team is already analyzing the new documents to understand precisely how to move. For the moment, no response from Huawei.