Podcast: Huawei Losing TSMC Access is a Bigger Deal than Losing GMS

A year ago, Huawei was put on the US Entity List, which cut off the Chinese smartphone giant and telecom equipment maker from doing businesses with most businesses in the US. The resulted of this was losing access to Google Mobile Services (GMS), including the Play Store. Now, on May 15, the US Bureau of Industry and Security (BIS) released new orders, specifically targeting Huawei, making it harder to acquire semiconductors that are created using certain U.S. software and technology. As a result, TSMC has stopped taking chipset orders from the Chinese smartphone maker. For more insights you can read this.

Though TSMC needs to follow the new US BIS restrictions, it has 120 days to clear the WIP (wafer in process). Huawei heavily relies on TSMC for chipsets to use in its range of smartphones, including the ones from sub-brand Honor. Losing access to TSMC chips is a bigger deal than losing access to GMS. At the same time, TSMC is also at a loss, as around 10-15% of its business comes from Huawei.

TSMC sure has been caught in the crossfire between the US and Huawei. But what options does Huawei have? Will it hamper the company’s upcoming product launches? Can China retaliate? We have covered all these questions and concerns in our podcast. In the latest episode, “The Counterpoint Podcast” host Peter Richardson and associate director Brady Wang discuss the implications of the new rules announced by the US.

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