Shocking news for TSMC

TSMC logo in front of the company headquarters. Photo: Bloomberg .

The US government has announced that it will revoke the license that allows TSMC to freely ship equipment to its manufacturing facility in China. The latest move could affect the productivity of the factory, which is used to produce older generation chips.

According to Bloomberg , US officials have notified TSMC of the termination of the company's authenticated end user (VEU) status for its Nanjing plant. Previously, the US also revoked VEU licenses for Chinese plants of Samsung and SK Hynix.

“TSMC has received notice from the US government that our VEU license with TSMC Nanjing will be revoked, effective December 31, 2025.

“While we assess the situation and take appropriate action, including communicating with the US government, we are committed to maintaining TSMC Nanjing’s operations,” TSMC said.

New moves by the US government threaten manufacturing operations in China for some of the world's largest chipmakers.

While U.S. officials have said they will grant licenses to continue operations, the shift from general to individual VEU licenses has left companies uncertain about the timing. Officials are working on ways to reduce red tape, given the complexity of the current requirements, the sources said.

Compared to Samsung or SK Hynix, TSMC's production scale in China is relatively small. The Nanjing factory only started operating in 2018 and does not contribute much to the revenue structure. The factory's most advanced process is 16nm, which was commercialized more than 10 years ago.

In announcing the revocation of VEU licenses for Samsung and SK Hynix in late August, the US Department of Commerce’s Bureau of Industry and Security (BIS) said the move was aimed at addressing “export control loopholes” that could put US companies at a “competitive disadvantage”.

After the effective period, companies whose VEUs have been revoked must proactively apply for a license from the US to transport restricted goods to China. The controlled items are very broad, ranging from manufacturing equipment, spare parts to chemicals.

According to Bloomberg , the new move shows that the US government wants to increase control over the supply chain of chips, important components for most electronic devices. This happens even though the factories are operated by 3 non-US companies.

In recent years, the US has significantly restricted China's access to advanced chipmaking materials and equipment, aiming to limit the country's competitiveness with the US in the AI race.

Under the administration of former President Joe Biden, Samsung, SK Hynix and TSMC were all granted indefinite exemptions from the controls, provided they complied with confidentiality requirements and disclosed the latest information to the US government.

For the above 3 companies, VEU license is considered an important factor for businesses to easily import materials and maintain factory operations.

Source: https://znews.vn/tin-soc-voi-tsmc-post1582108.html