TSMC processor orders remain strong despite pandemic and other issues

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TSMC is no longer taking orders from Huawei.

Kung Ming-hsin, leader of Taiwan’s National Development Council, stated the Taiwanese Semiconductor Manufacturing Company (TSMC) has already made up its lost Huawei orders. The component maker stopped taking chipset commissions from the smartphone maker because of a newly issued U.S. export control.

Kung did not say which client took advantage of TSMC’s schedule flexibility, but there are some likely suspects.

TSMC’s Rapid Rebound

In mid-May, the United States Department of Commerce forbade firms from selling American-based technology products to Huawei. The government agency initiated the mandate to shore up loopholes in the trade ban it launched last spring. Though a foreign brand like TSMC does not fall under the Commerce Department’s purview, its cutting-edge microelectronics production process features U.S. tech.

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In response to the new edict, TSMC reportedly stopped taking new orders from its longtime partner.

Since Huawei represented 14 percent of the chipmaker’s 2019 sales, the loss of its business seemed like a major blow. However, Kung said the firm had already filled its open production slots. Moreover, the Taiwanese official said Washington made it clear it did not want the island to “cut ties” with China. Instead, the U.S. government explained it is going after the telecommunications company because of its lack of operational transparency.

Which Corporation Took Huawei’s Slot?

Currently, neither Kung nor TSMC publicly identified the corporation that assumed Huawei’s place on the semiconductor firm’s production schedule. That said, recent industry developments suggest some highly probable candidates.

The Taiwanese chipmaker is an Apple supplier, so the Cupertino, California-based corporation would make a lot of sense. After all, the brand will need a lot of custom processors to power the four iPhone models it will reportedly release in the fall. Though demand for the brand’s first 5G-enabled handset is unclear, the company might have snapped up the open production spot to fortify its inventory.

In addition, the Big Tech firm is depending on TSMC to fabricate the ARM processors for its next-generation Mac products. Because Apple committed to releasing an ARM-powered PC this year, it could have nabbed Huawei’s old slot to aid its hardware business.

Also, TSMC will fabricate the Nvidia components powering the PlayStation 5. As Sony will launch its ninth-generation video game console this winter, it might have grabbed Huawei’s previous reservation to bolster its holiday season inventory. On the other hand, Microsoft could have made a play to outmaneuver its rival by securing additional Taiwanese-made chipsets for its forthcoming Xbox Series X.

Regardless, the manufacturer’s ability to rapidly fill a presumably large production order gap indicates its full-year revenue will be robust.

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