Taiwan Semiconductor Manufacturing Co Ltd (TSMC), the world's biggest contract chipmaker and a key Huawei supplier, has stopped accepting new orders from Huawei Technologies in response to the U.S. government. The next Washington's step is to limit the supply of chips to the Chinese company.

Donald Trump Extended Sanctions Against Huawei Until May 2021
U.S. President Donald Trump has extended an order that prohibits U.S. companies from using telecommunications equipment manufactured by companies that pose a threat to U.S national security.

The orders that TSMC took before the new ban will not be affected and will continue to be executed if these chips can be sent to the customer by mid-September.

Last Thursday, TSMC announced plans to build a new $12 billion chip manufacturing plant in Arizona and added on Friday that the company is closely monitoring changes in U.S. export regulations. On Monday, TSMC already stopped accepting new orders from Huawei.

This way, American TSMC customers will be able to manufacture their chips domestically.

A new decree unveiled by the U.S. Commerce Department on Friday expands U.S. powers. Now, the U.S. government reserves the right to require licenses for the sale of Huawei semiconductor devices manufactured abroad using U.S. technology. It will significantly expand the scope of U.S. restrictions and allows stopping exports for the Chinese technology giant.

Huawei declined to comment. At the same time, TSMC said it did not disclose order details.