China’s Chip Race Just Got Even Tougher — Thanks To TSMC

China, not just Huawei, has been having a hard time advancing its semiconductor ambitions. This is because of the ongoing US-China trade war, in which the US has placed restrictions on the type of technology that can be sold to China and encouraged its allies to follow suit. Now, things are getting tougher with TSMC placing Huawei and SMIC on an export restriction list.

Huawei and SMIC are facing export restrictions from TSMC

TSMC isn’t the sole one making the decision here. This is according to Taiwan’s International Trade Administration, which has placed Huawei and SMIC on an updated list of entities that face export restrictions. This means that if any Taiwanese company wants to export to Huawei or SMIC, they will need government approval.

TSMC says it stopped shipping orders to Huawei in September 2020. However, the company was hit with a $1 billion fine after discovering that some of its chips made their way into Huawei’s Ascend 910B chipset. TSMC says it hadn’t sold its tech to Huawei directly. Instead, it was sold to another company called Sophgo, which was then used to produce the Ascend 910B.

The company also issued a statement saying, “If we have any reason to believe there are potential issues, we will take prompt action to ensure compliance, including conducting investigations and proactively communicating with relevant parties including customers and regulatory authorities as necessary.”

Huawei is not too worried

Huawei has been in the US government’s crosshairs for years. Granted, things looked a bit bleak for the Chinese company when it was placed on the US Entity List. Any ambitions it had to overthrow Apple and Samsung in the smartphone space went up in smoke almost instantaneously.

However, Huawei did not give up. In 2023, the company shocked the world when it launched a phone using a chipset built on the 7nm process. It was initially assumed that Huawei or its partners did not have the capability to do so. Since then, Huawei and other Chinese semiconductor firms have been hard at work. They are doing a lot of research to find ways of advancing their semiconductor ambitions without using some key pieces of technology, namely ASML’s EUV lithography machines.