Today, on the anniversary of Huawei’s inclusion in the U.S. Commerce Department list of entities that prevent the company from accessing its S.A. supply chain, the other shoe has fallen. CNBC reports today that the Trump administration is blocking chip shipments to Huawei from foundries around the world. Most tech companies like Apple, Qualcomm, and MediaTek design their own chips but don’t have the facilities to make them. This is where foundries like TSMC come in; the latest chips from manufacturers such as A13 Bionic for Apple, Kirin 990 for Huawei, and the Snapdragon 865 mobile platform for Qualcomm.
Trump fires a near-fatal blast at Huawei,
The Commerce Department said today that it is changing the export rule to “focus strategically on the acquisition of Huawei semiconductors which is a direct US software and technology product.” The department said, “today’s announcement puts an end to Huawei’s efforts to undermine U.S. export controls.” Huawei is transferring the production of some chips to SMIC, the largest Chinese foundry, at 14nm, process nodes behind TSMC’s 5 nm process node, which is the difference between packaging a chip with about 44 million chips per square mm and 171.3 million per square mm Huawei uses SMIC production capabilities for the chipset Produce a Kirin 710A for mid-range phones.
A special license is required for TSMC to Ship their products to Huawei:
Meanwhile, TSMC is expected to be the first to introduce Huawei’s first Kirin 5nm chip this year. This component is expected to power the upcoming Mate 40 series, the most technologically advanced phones of the year at Huawei. Under the rule change, foreign foundries using chip-making equipment sourced from the United States will be forced to obtain a license from the U.S. before sending chips to Huawei or its subsidiary HiSilicon. Market Secretary Wilbur Ross said the rule change “will prevent U.S. technologies from enabling malicious activities that run counter to U.S. national security and foreign policy interests.” Ross claims that Huawei and its subsidiaries “made an effort to undermine these restrictions on national security.” The U.S. will allow the delivery of slices already in production to Huawei, while shipments will be made within 120 days at the latest.
Because it is on the U.S. Entity List, Huawei is not allowed to use Google Mobile Services for its phones. This means that Huawei mobile phones cannot run applications such as Google Play Store, Gmail, Google Maps, Google Search, Drive, and many others. There’s no real reason for this in China, where most Google apps are banned anyway. However, this affected the sales of Huawei devices outside China. Despite the ban, Huawei was able to launch 240 million phones last year for a 17 percent annual profit. The company is tracking Samsung but managed to overtake Apple’s iPhone shipments last year. This could not satisfy US President Donald Trump, especially when there were signs that Huawei could buy the US network at sea.
Huawei is the world’s leading provider of network equipment. The U.S. has repeatedly asked its allies not to allow the use of Huawei equipment in its 5G networks. However, Huawei has been providing technology viewers in front of its competitors and customers for years with exceptional financing terms due to its connections with the Bank of China. Earlier this week, President Trump extended a ban on the use of network equipment by companies considered a national security threat in countries. In addition to Huawei, this directive is also intended for the Chinese co-producer ZTE. The United States believes both companies are threatened by national security because of alleged links to the Chinese Communist government. Some rural telecommunications companies in the United States are using Huawei network equipment under a temporary license that is due to expire today. The Ministry of Commerce’s temporary license expired on August 13, noting that this will extend the license’s validity date for the last time.