Chip contract absence from Huawei is hurting TSMC very bad, says research

Throughout recent years, the partnership between Huawei and TSMC (Taiwan Semiconductor Manufacturing Company) has grown to the next level and both of these tech giants have benefited from each other cooperation.

Back in May 2019, the US Commerce Department added Huawei into the Entity -List that prohibited the company from purchasing U.S.-made technology or selling its products in the country. That results from self-developed chips cannot be manufactured and cannot import components from third parties.

The company affected Especially by its flagship mobile phones because TSMC could no longer continue to produce Huawei designed chipset.

Huawei is one of the biggest customers of TSMC and the company’s latest Kirin 9000 chipset is developed by TSMC’s  5nm process technology. This chipset was first used in the Huawei Mate 40 series, Mate X2 foldable phone, and more to come.

Due to the U.S. sanctions, TSMC is unable to do business with Huawei for its advanced manufacturing processes. As it could not provide the chip-making services to the Chinese smartphone maker for its upcoming flagship devices.

According to the data generated by the information network, in 2019, Apple was at the top rank that contributed about 24% of TSMC’s revenue, and Huawei was second which contributed 15%.

In 2020, affected by many unfavorable factors but Huawei still ranked second with a 12.8% contribution in TSMC’s revenue after Apple. However, in 2021, things are different The Taiwan company does not expect any revenue from Huawei in terms of customer contribution.

According to the data, TSMC’s sales revenue from Huawei in 2019 is about 36 billion yuan and in 2020 it will reach 38.9 billion yuan. so, it’s quite a heavy toll for the Taiwanese company.

(Via)