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CHINA BRIEF | Alibaba ramping up TSMC orders as Huawei moves to mainland for chips

By late 2019, Huawei accounted for 13% to 15% of TSMC’s sales.

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Alibaba’s semiconductor company, Pingtouge, has strengthened its ties with Taiwan Semiconductor Manufacturing Company (TSMC) and Taiwan-based Global Unichip Corporation for its in-house AI and cloud server related chip development, Digitimes reported on Thursday.

Pingtouge was formed in 2018 out of Alibaba acquisitions C-SKY Microsystems, a Chinese chipmaker, and its research arm DAMO. In September 2019, Pingtouge released its first AI inference chip, a neural processing unit named Hanguang 800.

Digitimes reports that Pintouge is emerging as a major client of TSMC, a potential boon for the Taiwan chipmaker as Huawei has reportedly been shifting chip orders away from TSMC to Semiconductor Manufacturing International Corporation (SMIC). By late 2019, Huawei accounted for 13% to 15% of TSMC’s sales, Reuters wrote, citing analysts.

The move to Shanghai-based SMIC follows Huawei’s strategy to decrease reliance on overseas manufacturing for critical components as the trade war and US blacklisting threaten the electronics giant’s supply chains.

This article is part of KrASIA’s “China Brief” section, where KrASIA’s reporters will provide quick daily updates about the tech ecosystem in China.