Huawei showcases the Kirin 980 chip along with other devices at the South & Southeast Asia Commodity Expo and Investment Fair in Kunming, Southwest China's Yunnan Province in June. Photo: IC

The Chinese mainland welcomes companies from the island of Taiwan to participate in the mainland's 5G construction, and it believes that the mainland market will bring massive benefits to Taiwan companies, Ma Xiaoguang, spokesperson of the Taiwan Affairs Office of the State Council, said on Wednesday. 

Experts believe that cross-Straits cooperation is essential for Taiwan-based suppliers to keep their 5G capacity from falling behind.

Cross-Straits cooperation on telecom development, especially the development of 5G has been strong, but the cooperation has constantly faced threats from the US over the past year, as Washington has tried to sever the semiconductor supply chain in Asia.

Last month, a US official tried to persuade Taiwan against supplying Huawei, the world's leading 5G company, claiming that the chips from Taiwan Semiconductor Manufacturing Co (TSMC) would be used against Taiwan and that Taiwan is "under a direct military threat", according to a report by the Financial Times on November 3. 

Huawei has been working closely with TSMC regarding 5G chips. According to media reports, Huawei's latest Kirin 990 5G chipset, which will power Huawei's latest 5G smartphones like the Mate 30 and the foldable Mate X, is integrated with the 7-nanometer lithography technology from TSMC. 

Xiang Ligang, director-general of the Beijing-based Information Consumption Alliance, told the Global Times that for companies in Taiwan, mainland enterprises are indispensable as they represent the largest market with the highest demand for the company's products.

"Stopping supplies to Huawei will pose a huge challenge to TSMC's business," Xiang said. "Huawei is currently the company's biggest client, so a prohibition in supply will mean massive amounts of overstock. That is also why companies like TSMC have repeatedly voiced support for Huawei."

TSMC has denied allegations that it will be blocked from supplying Huawei, and stated that it will continue to supply the company and comply with trade regulations, according to media reports.

TSMC spokesperson Elizabeth Sun said the company had no discussion with the Taiwan authorities or the US government regarding shipping wafers to HiSilicon, the fabless semiconductor company owned by Huawei.

Close cross-Straits cooperation will also accelerate 5G deployment in Taiwan, Xiang said, as Taiwan is lagging behind in 5G deployments. Participating in the mainland's deployment, and potentially allowing mainland companies into the 5G construction process in Taiwan, will lower the cost and speed up the deployment process. Taiwan will only start the auction of 5G spectrum on December 10 and the winning bidders will be awarded 5G licenses by the end of January 2020, according to local media reports. According to Chungwa Telecom, the largest telecommunications company in the island of Taiwan, 5G service in Taiwan is expected to start in July next year.

5G research and development is also highlighted in the "26 measures" introduced by the mainland on November 4, the latest measure to accelerate integrated cross-Straits development.