Huawei is the most affected company during the ongoing US-China trade war. Earlier this month, news broke out that China's Semiconductor Manufacturing International (SMIC) could be the next target for the US agencies. According to Digitimes, Qualcomm is now preparing to shift its chipset production from SMIC to foundries in Taiwan.
In the last few weeks, Qualcomm executives have been visiting foundries in Taiwan for securing the manufacturing lines. The company is taking these precautionary measures to avoid disrupting its production in case the ban on SMIC comes into effect.
Qualcomm looking to move its production from SMIC
As per the source, Qualcomm is among the top three clients for the SMIC's chip manufacturing business. The US chip giant alone accounts for a whopping 13 percent of the company's overall revenue. Currently, SMIC is responsible for manufacturing application processors (AP) and system on a chip (SoC) using 28nm and 14nm processes.
It also supplies power management chips using 0.18-micron process technology. However, TSMC lacks advanced technologies for manufacturing SoCs using the latest 7nm and 5nm processes. It is also why Huawei reportedly deciding to end its flagship Kirin chipsets after TSMC was banned from working with the Chinese company.
Will shift the production to Taiwan once the ban comes into effect
Qualcomm is in talks with United Microelectronics (UMC), Vanguard International Semiconductor (VIS), and Taiwan Semiconductor Manufacturing Company (TSMC) for moving the production from China to Taiwan.
When the ban comes into effect, the US-based companies have to get special permission to work with these blacklisted companies. The same also applies to all the companies in the world depending on US technology. When the report first came out, SMIC said it was shocked by the allegations made by the US government.
It also officially denied having any sort of ties with the Chinese military. Even Huawei also put out the same statement when the ban came in to affect. Meanwhile, SMIC is also receiving incentives from the Chinese government to improve the domestic semiconductor business.
While TSMC and Samsung have started prototyping 3nm chips, TSMC will move towards 7nm production. From the last couple of months, the US government was forcing Bytedance to sell TikTok's American operations to a US-based company.
As per the recent report, Bytedance along with Oracle and Walmart will make TikTok a separate entity. Interestingly, WeChat was able to get a last-minute relief after a judge put the ban on hold.