Shares of Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday tumbled 2.23 percent as investors cautioned of the adverse effects of a US ban on using products from China’s Huawei Technologies Co Ltd (華為).
TSMC supplies advanced 7-nanometer processors to HiSilicon Technologies Co (海思半導體), the chip-designing arm of Huawei.
Shares of TSMC fell to NT$241.5, contributing to a NT$609.36 billion (US$19.47 billion) drop in market capital for the company since May 5, when US President Donald Trump tweeted that the US would hike tariffs on US$325 billion of Chinese goods.
Trump on Thursday signed an executive order declaring a national emergency that would ban US companies from using telecommunications equipment made by firms that might pose national security risks.
The US Department of Commerce later added Huawei and its affiliates to the Bureau of Industry and Security’s “Entity List,” barring the companies from procuring components and technology from US firms without government approval.
Huawei’s handset manufacturing and even sales might have to shut down completely due to the ban, Yuanta Securities Investment Consulting Co (元大投顧) said.
That might mean an order loss for TSMC, which mainly provides high-end processors such as its 7-nanometer Kirin 980 chipset to Huawei, the investment consultant said.
“The impact would likely be neutral,” as the loss might be compensated by order gains from MediaTek Inc (聯發科) or Qualcomm Inc, Yuanta said.
Washington might next ban US companies from exporting key components to China, or even from selling software to Huawei, it said.
“Our channel checks suggest that the market generally believes Huawei has raised its inventory to a level that would enable it to meet seven months of demand,” Yuanta said.
Even if the US bars component exports to China across the board, the effects on Huawei should be limited in the short term, it said.
TSMC is not the only firm in Huawei’s supply chain to suffer the brunt of the US ban.
Shares of Largan Precision Co (大立光), which supplies camera lens to Huawei and Apple Inc, yesterday plunged 9.41 percent to NT$3,850.
Since May 5, Largan’s market value has tumbled NT$110.67 billion.
The US ban might weigh on Huawei’s handset sales growth this year, Yuanta said, adding that Huawei mainly purchased camera lens and flat panels from Taiwanese suppliers.
Polytronics Technology Corp (聚鼎科技) yesterday announced that it is buying Henkel AG’s thermal clad dielectric material (TCLAD) business division for US$26 million as the Taiwanese firm aims to improve its technology, product portfolio and revenue performance. Polytronics, headquartered in the Hsinchu Science Park (新竹科學園區), is a supplier of protection components and heat dissipation materials. The firm entered the metallic heat-dissipation substrate market in 2007 and developed a unique solventless production process. Its board of directors approved signing an agreement with Henkel to acquire the German chemical firm’s TCLAD division in the US. The purchase includes all assets and business interests, including equipment,
‘SENSITIVE MARKETS’: The previously unannounced project would involve the company handing over control of data to a third party to sidestep privacy concerns Google has abandoned plans to offer a major new cloud service in China and other politically sensitive countries due in part to concerns over geopolitical tensions and the COVID-19 pandemic, two employees familiar with the matter said, revealing the challenges for US tech giants to secure business in those markets. In May, the search giant shut down the initiative, known as “Isolated Region” and which sought to address nations’ desires to control data within their borders, the employees said. The action was considered a “massive strategy shift,” said one of the employees, who added that Isolated Region had involved hundreds of employees
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday posted monthly revenue that suggested second-quarter sales surpassed analysts’ estimates, underscoring how its technological lead is helping the chipmaker weather the COVID-19 pandemic and US sanctions on its second-biggest customer Huawei Technologies Co (華為). Apple Inc’s main iPhone chipmaker posted sales of NT$120.88 billion (US$4.08 billion) for last month, up 40.8 percent year-on-year and bringing its revenue for the second quarter to NT$310.7 billion, beating the NT$308.8 billion analysts expected on average. TSMC, a barometer for the industry thanks to its heft in the global supply chain, had previously lowered its revenue outlook for this
ELECTRIC FARMLAND: TSMC’s proposal to clear 230 hectares of reforested land for what would become Taiwan’s largest photovoltaic solar farm has generated concerns New rules curbing solar farms built on agricultural land sparked fierce debate at a packed public hearing at the Legislative Yuan yesterday, with industry representatives saying that the new restrictions would endanger President Tsai Ing-wen’s (蔡英文) green energy goals, while agricultural officials emphasized the importance of protecting farmers and the environment. The Tsai administration has set a target to generate 20 percent of the nation’s power from renewable sources by 2025, by which time it also aims to install 20 gigawatts (GW) of solar power, including 6GW from rooftop solar systems and 14GW from ground-mounted solar farms. Although rooftop solar systems are