Chinese telecommunications firm Huawei is shifting production of its in-house designed chips away from a major Taiwanese chipmaker.

Details: The Shenzhen-based telecommunications company is moving its chip production towards Shanghai-based Semiconductor Manufacturing International Corp (SMIC) from Taiwan Semiconductor Manufacturing Co Ltd (TSMC), said a report by Reuters, citing sources familiar with the matter.

  • HiSilicon, their chip design subsidiary, has already started telling its engineers to design for SMIC instead of TSMC in late 2019, according to one of Reuters’ sources.
  • The company said in a statement the shift was “common industry practice” and that the company “considers carefully issues such as capacity, technology and delivery when choosing semiconductor fabrication plants.”

Context: A federal ban by the Trump administration last May barred American companies from exporting components and technology to Huawei without government approvals.

  • The Trump administration is considering to expand the ban to more foreign companies that use US technology, including Taiwan’s TSMC.
  • Huawei warned last month of retaliation by the Chinese government if the US ban upgrades.
  • “The Chinese government will not just stand by and watch Huawei be slaughtered on the chopping board,” Eric Xu, Huawei rotating chairman, said at a press event last month.

Writing about semiconductors and telecommunications.