China's Chipmaker SMIC Asks for US Permission to Continue Supplying Huawei

September 17, 2020 4:45 am

Beijing (PingWest)—SMIC, China's semiconductor manufacturer, has asked for approval from the US to continue supplying Huawei, state media outlet Beijing News reported on Tuesday.

The company said that it had applied to the US to continue to supply Huawei in accordance with regulations and reiterated that it will comply with relevant laws and regulations in all countries and regions.

The Trump administration imposed restrictions on Huawei in May, prohibiting major semiconductor equipment suppliers from supplying or serving Huawei, effective September 15. Companies wishing to continue doing business with the Chinese smartphone makers must now first obtain a license from Washington.

Taiwan Semiconductor Manufacturing Company (TSMC), the most important manufacturer of Huawei's high-end mobile phone chipsets, said in July that it would stop supplying products to Huawei before the deadline.

According to Bernstein research, Huawei is a major customer of SMIC, accounting for 20% of the manufacturer's revenue. However, it cannot produce the most advanced chips in Huawei's Kirin mobile chipset, and it still relies on equipment from the US companies.

In addition, earlier this month, Reuters reported that the Trump administration is considering imposing restrictions on the company similar to those it placed on Huawei.

The Chinese government is working hard to foster the development of the domestic chip industry, thereby cutting China's reliance on foreign suppliers.

Quanxin Integrated Circuit Manufacturing (QXIC) and Wuhan Hongxin Semiconductor Manufacturing Company (HSMC), two Chinese government-backed chip projects, have together hired more than 100 veteran engineers and managers from TSMC.