Taiwan bans exports of Huawei and SMIC chips
By ForGeeks Taiwan’s Ministry of Economic Affairs has announced a ban on shipments of semiconductors from Huawei and SMIC. In doing so, the republic for the first time backed US sanctions against the Chinese tech giants. The decision was the culmination of five years of negotiations and pressure from the U.S., which had previously threatened TSMC with a billion-dollar fine for supplying Huawei’s chiplets.
What’s the difference between a chip and a chiplet
The classic monolithic chip is created on a single crystal and is completely manufactured on a single process. Even blocks that don’t need top-end lithography are forced to use it, which increases complexity and cost.Chiplets are a modular approach: individual small crystals (CPU cores, GPUs, memory controllers, AI modules, etc.) are made using different manufacturing processes and then combined into a single package. This method combines advanced and simpler nodes to optimize cost and energy efficiency.
Why TSMC is under attack
TSMC uses technology solutions from the US, so even before Taiwan’s decision, it couldn’t supply Huawei and SMIC with the latest chips without a US license. Violating those rules threatened the company with a fine – up to $1 billion, according to insiders – for shipping a chiplet for the Ascend 910B AI gas pedal.The new domestic restriction effectively closes off the ability to export any key semiconductors to Chinese customers, even if they are not among the “critical” items on the U.S. sanctions list.
Implications for the Chinese industry
The sanctions have forced Huawei and SMIC to switch to more expensive and less precise manufacturing methods, such as old-generation multi-template excimer lithography. This partially closes the technology gap with TSMC, but significantly increases production costs and reduces yields.
What’s next
– Huawei will continue to develop its own design solutions, focusing on chiplets and domestic processes.- SMIC, remaining the world’s third-largest contract manufacturer, will accelerate investment in alternative technologies, although it cannot yet catch up with TSMC’s 3nm norms.- The U.S. could tighten controls on ASML and other manufacturers’ equipment to deny China access to the latest generation of lithography scanners.- Taiwanese authorities will have a stronger negotiating argument with Washington, but risk losing some orders if Chinese customers find workarounds.
The new embargo finally sets a hard line for Chinese companies in the race for semiconductor sovereignty and increases the global market’s reliance on solutions from TSMC and Samsung Foundry.
The Taiwan bans exports of Huawei and SMIC chips was first published on ITZine.ru.
