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By restricting its access to semiconductors designed and fabricated through American-origin technology, the United States Department of Commerce has limited Chinese telecommunications giant Huawei Technologies Inc's ability to manufacture the critical components by itself. Following the regulations, Huawei will be forced to acquire these products from third-party companies, with Taiwan-based MediaTek Inc reportedly being in the top spot to fulfill the company's needs.
On this front, MediaTek has applied to the Commerce Department for a license that allows the company to conduct business with Huawei. The need for a license arose following the Department's latest sanctions described above, should MediaTek not receive the waiver, then it will be unable to supply Huawei with the chips after mid-September.
MediaTek's License To Prove Crucial For Huawei's Ability To Continue Operating Normally
The details of the application were revealed by a MediaTek spokesperson to a China Business News reporter according to Sina Technology. This application is only one of many that the U.S. government has to review for approval given the complex nature of global supply chains and Huawei's dependency on several American companies for its products.
Prior to the sanctions, the company was only one of three in the world that both designed its own smartphones and equipped them with central processing units (CPUs) and graphics processing units (GPUs) designed by itself. The other two companies with a similar structure are Cupertino tech giant Apple Inc and South Korean chaebol Samsung Electronics, who respectively equip their gadgets with the An and Exynos lineup of CPUs and GPUs.
Huawei Kirin lineup of processors were designed by its HiSilicon division and manufactured by the Taiwan Semiconductor Manufacturing Company (TSMC) whose leading-edge semiconductor manufacturing processes (or technologies) had enabled the company to stay at the forefront of the flagship smartphone race.
Following the latest sanctions which not only restricted Huawei's ability to source American-origin products subject to export control regulations but also targetted the company's affiliates located all over the globe, Huawei has few options left to stay competitive in the smartphone world. TSMC and Samsung are the only companies in the world that have foundries advanced enough to churn out processors build on leading-edge fabrication nodes.
According to MediaTek's statements, the company will comply with U.S. sanctions and supply Huawei with the chips until September 14th. If by then its license application is approved by the American government, then MediaTek will continue with the shipments beyond this deadline, and if the application is not approved, then the company will stop making shipments to the Chinese company.
Previous reports mentioned by Sina Technology have suggested that Huawei has ordered roughly 120 million chips from MediaTek, and that the company's products due for launch this year will use them. Following the tough sanctions, Huawei has also stepped up its efforts to develop an in-house semiconductor manufacturing facility that does not use American-origin technology. It has also started to recruit 'geniuses' to given it an edge in the research and development arena.
Presently, China's Semiconductor Manufacturing International Corporation (SMIC) is another entity that can supply Huawei with its silicon needs. However, SMIC's manufacturing technologies are not as advanced as either those belonging to Samsung or TSMC, and reports in the Chinese media speculate that it will be able to build mass-produce chips on the 7nm node by next year.
While these 'nodes' are often marketed in terms of fin width (which is in nanometers), those under similar branding but used by different fabs are not similar to each other. Some differences include different elements for low-level fabrications, different fin pitches and fin heights.