Huawei Technologies is gradually shifting the production of its microchips from Taiwan Semiconductor Manufacturing to a firm on mainland China SMIC. It is unclear how many chip production orders Huawei has added to SMIC.
According to Reuters, which cited a person familiar with the matter, the decision to source more chips from Shanghai-based Semiconductor Manufacturing International Corp (SMIC) was taken in anticipation of new US rules which would require foreign companies to use American chipmaking equipment to obtain a license before supplying chips to Huawei.
“Before, Huawei wanted to work with top-notch manufacturers, and SMIC was just second-tier,” the person said. “We are now moving resources to SMIC to speed up our help to them.”
“Huawei considers carefully issues such as capacity, technology, and delivery when choosing semiconductor fabrication plants,” it said.