The US government has revoked TSMC’s authorization to export advanced technology to China, potentially affecting its chip manufacturing operations in the country. This action, part of broader export controls, is seen to have a limited impact on TSMC’s overall business due to the nature of its Chinese facility.
Washington has pulled Taiwan Semiconductor Manufacturing Company’s authorization to freely ship advanced technology from the US to China, as confirmed by the company. This move could disrupt TSMC’s manufacturing capabilities in China, where it produces older-generation semiconductor devices.
The US government notified TSMC that its authorization under the Validated End-User (VEU) program will be revoked by the end of the year. This follows similar actions taken last week against South Korean chipmakers Samsung and SK Hynix, tightening the flow of American technology to Chinese plants.
TSMC has stated that it is assessing the situation and plans to engage in discussions with US authorities. The company remains committed to ensuring the uninterrupted operation of its facility in Nanjing, China, which focuses on producing less advanced chips.
The US initially granted waivers to some global tech firms under sweeping restrictions aimed at safeguarding its economic interests and preventing the transfer of advanced technology to China. However, the revocation of these waivers makes it harder for companies to ship essential equipment without individual approvals.
According to investment specialist Raymond Woo, this move by the Trump administration could make shipments more expensive and complicated, as suppliers will need to apply for licenses on a case-by-case basis. This could slow down the process and increase costs for chip manufacturers.
Chinese customers might be forced to turn to domestic alternatives, which are often several generations behind in technology. However, this could also drive innovation as Chinese companies optimize existing equipment where high performance is not critical.
The overall impact on TSMC is expected to be limited, as its Nanjing facility produces older chips that constitute a small portion of its total revenue. TSMC is the world’s largest semiconductor foundry, serving clients like Nvidia, and its primary operations are outside China.
This development underscores the ongoing tensions in US-China trade relations and the strategic importance of semiconductor technology. Future steps may involve further negotiations or adjustments in export policies as both sides navigate the complex geopolitical landscape.
