Huawei placed emergency orders to TSMC to make 5/7nm chip

According to Taiwan’s Economic Daily, the industry has reported that Huawei has urgently placed a order of $700 million to TSMC, covering 5nm and 7nm processes, making TSMC-related capacity full. On the evening of May 15, Beijing time, the U.S. Department of Commerce announced that it would extend Huawei’s temporary permit for another 90 days until August 13, 2020. But foreign companies that say they use U.S. chip-making equipment will be required to obtain u.S. licenses before supplying certain chips to subsidiaries such as Huawei or Hisilicon.

But the rule will allow chips already produced to be shipped to Huawei, as long as shipments are completed within 120 days starting from Friday. The chipsets need to go into production by Friday, or they will be banned under the latest rules.

Huawei to TSMC emergency under the emergency production of a large single 5/7nm chip

Industry analysis, TSMC must increase production capacity in order to meet customer’s huge demand for urgent orders, but also to allow the follow-up operation to maintain strong momentum.

Sources said that 5nm mainly produces Huawei’s next-generation flagship phone Kirin 1020 chip, 7nm version is the production of 5G baseband chip.

On may 15th, TSMC announced plans to build the world’s most advanced chip plant in Arizona, USA, which is scheduled to start construction in 2021 and start production in 2024. TSMC’s total expenditure on the project, including capital expenditure, will be about $12 billion from 2021 to 2029.

TSMC stressed that the u.S. plant is premised on “cost” and “in line with customer demand”, in the U.S. government is willing to solve the investment problems, let TSMC “see opportunities”, this investment has no political considerations.