Taiwan's TSMC faces possible impact from US-Huawei clash

Trump administration deliberates cutting Huawei off international chip suppliers such as TSMC

TSMC logo (TSMC, Facebook photo)

TSMC logo (TSMC, Facebook photo)

TAIPEI (Taiwan News) — U.S. President Donald Trump is considering cutting Chinese telecom giant Huawei Technologies off from global chip suppliers, including Taiwan Semiconductor Manufacturing Company (TSMC), according to two sources familiar with the matter.

The sources, who spoke anonymously, told Reuters that the U.S. government considers Huawei's access to the next-generation 5G mobile data networks a security risk and that it is drawing up different options to prevent it. Despite Huawei's denial that it engaged in intellectual property theft, American authorities believe that the Chinese multinational has been stealing technology and trade secrets from the U.S. as well as other countries.

According to Tech News, the U.S. Department of Commerce is drafting new changes to the Foreign Direct Product Rule, which was previously intended to prevent foreign countries from applying U.S. technology to military uses. The proposal, if approved, would greatly impact TSMC by forcing it to lose one of its biggest clients.

When asked about the possible impact, a spokeswoman for TSMC said that the company is not allowed to discuss individual customers. She added that TSMC will seek adequate solutions if the "hypothetical" scenario does take place.

U.S. Secretary of State Mike Pompeo on Saturday (Feb. 15) described Huawei as a "Trojan horse for Chinese intelligence" and suggested that the company is being used by the Chinese Communist Party (CCP) for spying. The U.S. ambassador to Germany, Richard Grenell, also confirmed Sunday (Feb. 16) that the Trump administration had threatened to cease intelligence-sharing with any countries that partner with Huawei, including the U.K. and France.