It seems like the Trump administration is doing everything it can to sabotage Huawei at this point and its latest plan is to make TSMC stop manufacturing chips for Huawei. How can they possibly do that since TSMC is based in Taiwan, you may ask? It’s simple – TSMC uses US-made manufacturing equipment.
A change in the US Department of Commerce’s Foreign Direct Product Rule has been proposed that will make companies using US technology seek license to sell to Huawei. And as you know, TSMC is the company’s main supplier for the Kirin chips.
And if this comes through somehow, it would be virtually impossible to manufacture chips without the use of US tech. There’s no production line in China that doesn’t use machines from the US.
However, some members of the Trump administration point out that this move would ultimately cost the USA a lot more than China or Huawei in particular. In the long run, such move would drive innovation away from the US and benefit China.
It’s not set in stone, though, as high-level meetings are being held this week and next week.