huawei 21 May 2020

US hails investment by Taiwan chip maker as it tightens controls on Huawei

US officials have hailed a decision by Taiwan’s biggest chip maker to invest $12 billion in the United States, saying America was ‘bringing high-tech manufacturing back home where it belongs,’ as the Trump administration tightened export controls on China’s Huawei.

Just as the Taiwan Semiconductor Manufacturing Company (‘TSMC’) announced last week that it is building a facility in Arizona to produce its next-generation microchips, the US imposed new restrictions on Huawei, severely limiting the Chinese phone giant’s ability to buy microchips designed and manufactured using US technology.

US Secretary of Commerce Wilbur Ross said that the Arizona facility ‘will be one of only two of its kind globally capable of producing the world’s most advanced semiconductors.’ He said that TSMC’s planned investment will create an estimated 1,600 high-tech jobs, in addition to thousands of additional jobs in the broader semiconductor ecosystem.

Japan’s Nikkei Asian Review reported this week that TSMC, which uses American technology to make its microchips, has halted new orders from Huawei in response to the tightened US export controls.

Meanwhile, Keith Krach, the US Under Secretary for Economic Growth, Energy and the Environment, hailed TSMC’s planned $12 billion investment as ‘a truly massive sum, in perhaps one of the most historic onshorings in decades.’

He added that, ‘The deal is a game changer for the U.S. semiconductor industry. TSMC is bringing its supply chain companies to the United States. This is a giant leap towards bringing high-tech manufacturing back home where it belongs.’ 

He charged that, ‘Since its addition to the entity list one year ago today, Huawei has persisted in its efforts to circumvent U.S. export controls.’

Speaking at a special 15 May briefing, he added: ‘Huawei benefited from a loophole that allowed it to make use of U.S. electronic design software and manufacturing equipment to continue to produce its own semiconductors. That ends today. The United States is closing this loophole to prevent Huawei from exploiting U.S. technology and threatening our national security.’