TSMC says it won’t postpone expansion over limits on orders from embattled Huawei

02, Jun. 2020

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TAIPEI, NNA—Taiwan Semiconductor Manufacturing Co., the world’s largest contract chipmaker, denied Tuesday that it is delaying the expansion of capacity to make chips through the advanced 5-nanometer process despite an anticipated fall in orders from the embattled Chinese firm Huawei Technologies Co.

Taiwan-based Economic Daily reported Monday said the Taiwanese company better known as TSMC would postpone its 5-nm chipmaking expansion as well as trial production of a 3-nm process to the first quarter in 2021. The news outlet said TSMC’s equipment suppliers would hold off deliveries until the end of the year because of United States’ possible limits on Huawei orders.

On May 15, the U.S. government said it would block chips shipment from Huawai, the source of a long-standing dispute between Washington and Beijing.

A TSMC spokeswoman reached Tuesday by NNA denied the report, saying “the timing is as per our original plan.” TSMC plans in 2022 to begin mass production of chips made through 3-nm technology and expects rollout by 2024 of capacity to make processors with a 2-nm scheme, according to its annual report from last year.

The numbers refer to the size of cuts that lithographs make in semiconductors. Lower numbers, such as 2 and 3, produce relatively small chips that can run on low power.

If it keeps exporting to the United States, TSMC must apply for a U.S. government waiver before it could also take more orders from Huawei, its second largest client.

After receiving Huawei’s orders for 5-nm and 12-nm chips on May 15, TSMC has stepped up production to roll out nearly 30,000 processors per month for Huawei’s subsidiary HiSilicon (Shanghai) Technologies Co., the Taiwan media report said. That schedule would get TSMC around a 120-day grace period allowed by Washington.

TSMC’s plant engineering services provider Marketech International Corp. said shipments were “as usual” despite U.S. pressure on Huawei, the spokeswoman told NNA Tuesday. The firm has pending orders worth NT$21.5 billion ($718 million), she added.