Huawei Moving Chip Manufacturing Away From Taiwan: Report

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  • The move might be inspired by US putting restrictions on the China-based company
  • Huawei has redirected some of its engineers towards designing for Shanghai-based Semiconductor Manufacturing International Corp (SMIC)

HiSilicon, Huwaei chip design and manufacturing unit, has started redirecting some of its engineers towards designing for SMIC instead of Taiwan Semiconductor Manufacturing Co Ltd (TSMC). A recent report by Reuters also pointed out that Huawei is moving its chip-making operations towards a China-based firm. This firm is manufacturing chips that Huawei has designed in-house.

The move, as per the report, has come at a time when US is preparing a new list of restrictions to be imposed on Huawei. It is to be noted here that US had called Huawei a threat to its national security last year and imosed trade bans on the company.

Reuters quoted an individual saying ,“Before, Huawei wanted to work with top notch manufacturers, and SMIC was just second-tier. We are now moving resources to SMIC to speed up our help to them.”

Common industry practice

Huawei, in a response to queries asked by Reuters, has called the development a common practice. TSMC told Reuters that it does not comment on individual customers while SMIC declined to comment. Huawei also clarified that it will be looking towards Korean firms and other Taiwan-based firms to get chips manufactured.

Interestingly, TSMC is termed as the largest contract-manufacturer of semiconductor chips. TSMC does not reveal how much revenue it makes from individual customers but Reuters quoted experts claiming that Huawei accounts for 13 to 15 per cent of its revenues.

Taiwan claimed the largest market for semiconductor equipment last year

Korea, which used to be on the top-spot on the list of markets for semiconductor equipment, was dethroned by Taiwan last year. Taiwan claimed the largest market for new semiconductor equipment last year with sales of $17.12 billion after a 68 per cent growth surge.

China, as per a report by Semiconductor Equipment and Materials Institute, maintained its position, as the second largest equipment market with sales of $13.45 billion. The country was followed by Korea at $9.97 billion, after receipts fell 44 per cent.

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