“China has virtually no room for maneuver,” said Pierre Ferragu, the head of technology research at New Street Research. “The U.S. definitely has the upper hand in the struggle.”
Tensions in the Taiwan Strait are rising more broadly this year.
The Trump administration has stepped up official exchanges with Taiwan ever since its president, Tsai Ing-wen, won re-election in January over an opponent who was friendlier to Beijing. In response, Chinese aircraft and warships have menaced the island with growing frequency.
When a State Department representative, Keith Krach, visited Taiwan recently, Ms. Tsai feted him at a banquet alongside a bevy of government dignitaries and TSMC’s retired founder, Morris Chang, a nod to the company’s significance to Taiwan’s relations with the United States.
American officials have taken a great interest in TSMC, whose advanced chips are used in fighter jets and other hardware critical to America’s military edge. The company said this year that it would build a new factory in Arizona, responding to American concerns about overreliance on offshore production.
Now, the Trump administration’s campaign against Huawei has forced TSMC to turn against one of its biggest customers. With the two companies unable to work together without licenses, Huawei may find itself unable to make its late-model handsets, an important chunk of its business, once it uses up its chip inventory.
“I don’t think Huawei has much of a future unless they can find some way to get their suppliers to get export licenses,” said Matt Bryson, an analyst with Wedbush Securities.
One of Huawei’s deputy chairmen, Guo Ping, said last week that the company was assessing its options.
Article source: https://www.nytimes.com/2020/10/01/technology/taiwan-china-tsmc-huawei.html