Huawei will continue to receive shipments from TSMC for the next 120 days

While the world is intent on fighting one of the hardest battles have ever encountered, the US government tries to divert attention from its sometimes questionable choices by relaunching what now appears to be a “war” or a crusade against Huawei.

These days the news of the extension, until May 2021, of the ban against the Chinese giant accused of maneuvering against the security of the United States, a statement on which no conclusive evidence has ever been brought. Despite everything, Huawei has held up for all of 2019, and only in the first quarter of 2020 has it set the pace, victim of the lack of support for Google services.

The Trump government does not seem satisfied and just yesterday announced new measures, showing the country’s strength to the whole world, following to the letter the motto that four years ago allowed the tycoon to settle in the White House by surprise: “Make America great again“.

Taking advantage of the immense portfolio of patents owned by American companies, the Department of Commerce has churned out a new rule, according to which foreign companies that produce technology using American patents must apply for a special license in order to sell their products to Huawei.

The first recipient of this provision is TSMC, of ​​which Huawei is one of the largest customers with over 5 billion dollars in turnover in 2019 alone. Huawei will continue to receive shipments from TSMC for the next 120 days, but only for products whose realization has already begun. In this way, the US wants to cut Huawei’s legs decisively, preventing it from continuing with its business. Trump’s move could change the Taiwanese company’s mind, which seemed ready to open its own plant in Arizona to produce 5-nanometer chips by 2023.

Huawei does not seem to have been taken by surprise, so much so that in recent months it has already started to probe the ground, leaving the production of some chipsets to the Chinese company SMIC. This does not mean that the difficulties for Huawei are destined to increase in light of the new provisions, which can hardly be circumvented.

In all this, of course, the Chinese government certainly does not remain at the window, given that one of the flagships of its economy is to be hit. According to the Global Times, which reported news published by the People’s Daily, the official press of the Chinese government, retaliation is ready against the largest American companies.

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In the crosshairs are over, and could not be otherwise, Apple and Qualcomm, but also Boeing could fall between the companies entered into an equivalent of the US Entity List. The Chinese market represents 15% of Apple’s turnover and the restrictive maneuvers to the study could significantly affect the Cupertino giant.

Of course, the Chinese government must better study the consequences of an indiscriminate ban: in fact, there are many Chinese producers who rely on Qualcomm solutions and a ban by the Californian company would be decidedly counterproductive and would risk bringing the situation back to a few years ago when the Chinese smartphones used cheaper and less performing chipsets like those made by MediaTek.

The Chinese strategy would aim to hit small businesses first, which would be forced to close their doors, a sort of warning for the United States, and the next step would be interventions against Apple, which in spite of Trump’s patriotic proclamations has always exploited the cheap labor of Chinese manufacturers to make huge profits.

After the partial truce due to the spread of the pandemic, it seems that the two superpowers are ready to resume the trade war from where it was interrupted, with increasingly drastic moves from which it seems difficult to be able to go back. And it could not only be Huawei and the possible companies banned in China, but also thousands of other companies connected to them.

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Aidan Rogers
Aidan Rogers
Aidan loves being described as Jack of all Trades. He is literally good at everything be it Singing, Writing, Games, Drifting, Hiking, Swimming and above all He is a good Teacher. He is also a web developer with over 100+ successful projects completed.