U.S President Donald Trump has reportedly claimed that all the complaints brought against Chinese telecommunications equipment company, Huawei Technologies Co. Other U.S. firms such as Qualcomm and Intel have also cut off shipments to Huawei.
Xiang Ligang, director-general of telecom industry association Information Consumption Alliance, said TSMC's commitment to continue shipping products is of strategic importance to Huawei.
A Huawei spokesperson told Fortune the operating system is a "Plan B" and "very last resort".
The first United States company to implement the ban was Google which removed Huawei's access from Android apps and updates.
Chinese state media has accused the U.S. of seeking to "colonise global business" by targeting telecom equipment giant Huawei and other Chinese companies with sanctions.
Details about Huawei's new operating system beyond the trademarked name remain scant. "Investors are stepping back at these levels, assessing opportunities entering the long weekend", said Andre Bakhos, managing director at New Vines Capital LLC in Bernardsville, New Jersey.
Considering the fact that most of Huawei's products rely on American chips and equipment, Washington chose to grant the company a 90-day reprieve to get its house in order before the ban fully kicks in.
The export ban on Huawei could also delay China's 5G rollout, Jefferies analyst Edison Lee said.
The US Government has recently taken strict action against the Chinese smartphone and cellular network maker Huawei.
The report also showed orders were not as strong as previously thought in March and shipments were weak over the last two months, further evidence that manufacturing and the broader USA economy were slowing after a growth spurt in the first quarter driven by exports and a buildup of inventories. President Trump in a statement on Friday floated the idea of using the Chinese tech firm as leverage in the ongoing trade negotiations with China, so Huawei's fate partly lie on the willing from Beijing to initiate discussion between both countries.
"In this way, it is hoping to achieve the colonisation of the global business world", the newspaper said.
Huawei still has to comment on the news. Revenue for Huawei's consumer business-which sells laptops, smartwatches and other gadgets-grew 45% previous year and is now the company's largest single business division.
Trump, who has embraced protectionism as part of an "America First" agenda, has threatened to slap tariffs of up to 25% on an additional list of Chinese imports worth about $300 billion.
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