The U.S restricts chip sales to the China giant Huawei. Is this a big blow?

May 17, 2020: Leaving a little wriggle room for the tech giant Huawei after the United States completely stopped the sale of chips to the technology giant. Billion dollars are at risk after Washington’s rule. The United States mentioned that any foreign country manufacturing semiconductors and chips for the tech giant need to get licensed and, it is also not sure if the U.S will approve the same.

The tech giants used to produce semiconductors, smartphones, and other products. The major production is from a company called TSMC. Which uses United States equipment to manufacture the chips and, after the rule which is been rolled out the company is most affected.

The Tech giant Huawei has a series of processors called Kirin which is used in almost every smartphone in which the company manufacturers and 98% of the chip is been manufactured by the Taiwan company TSMC.

As there are only very few options for the China Tech Giant to over some of the current situation and has asked China’s top chip manufacturer SMIC to do the needful. In the recent news stated that the company has already started manufacturing Kirin 710A chip and this will solve only a part of the problem as these chips are used for the low-end phones and only for some of the models.

The company uses 7nm production for the Kirin 990 chip production and, TSMC is one of the best and advanced production units. SMIC was not ready for the recent move of production and not sure if they can go ahead with the 7nm production. Huawei has to look into its largest competitor Samsung which is relying on the South Korean company is again an ally of the United States.

It would be difficult for the company as they have to look for a non-U.S tech-based supplier however, each company would use one or the other equipment produced by the United States.