TSMC removes Chinese equipment from production line to avoid US sanctions

Fearing that it would not receive preferential treatment from the US government, TSMC sought to remove Chinese-made equipment and materials from its most advanced chip production lines.

A semiconductor chip made by TSMC is displayed at the Cybersec 2025 Conference and Exhibition in Taipei on April 15 - Photo: AFP

According to Nikkei Asia magazine on August 25, chip manufacturing corporation TSMC is removing the use of Chinese equipment from its 2nm chip line - the most advanced type in the semiconductor industry - to avoid risks from the US.

These 2nm chip lines are expected to enter mass production in 2025. Production is planned to start first at the factory in Hsinchu City, followed by Kaohsiung City (Taiwan).

In addition, TSMC's third chip factory, under construction in Arizona (USA), will also produce this chip line when it comes into operation.

The decision is believed to stem from a regulation being considered by the US that could bar chipmakers from receiving funding or financial support from Washington if they use Chinese manufacturing equipment.

This provision is included in the EQUIP Chip Bill, proposed by a group of US lawmakers led by Senator Mark Kelly in late 2024.

The bill would prohibit recipients of federal aid and tax credits from purchasing equipment from “foreign entities of concern,” a term the semiconductor industry broadly understands to include Chinese suppliers.

Nikkei confirmed that the Taiwanese chipmaker is examining all the materials and chemicals it uses to make chips, aiming to reduce supplies from China in its production operations in Taiwan and the US.

At the same time, the company also aims to coordinate more closely with local suppliers in China for mainland production, in line with China's domestic policy priorities.

The strategy is designed to enhance supply chain resilience and, where possible, increase the use of locally sourced materials.

TSMC's decisions are the latest example of leading chipmakers trying to adjust to growing geopolitical uncertainties.

Back in 2024, TSMC was looking to replace Chinese equipment in its 3nm technology line, which was due to enter mass production in 2022. At that time, the company was planning to move the production line of this chip process to Arizona.

However, this effort requires significant time and resources, while still having risks affecting production yield and quality. Therefore, TSMC has decided to start removing Chinese tools from the 2nm process.

TSMC Chairman and CEO CC Wei said the company is accelerating construction of a chip factory in Arizona.

Once construction is complete, the US could account for about 30% of the company's advanced chip production, meaning chips with a 2nm process or better.

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Source: https://tuoitre.vn/tsmc-loai-thiet-bi-trung-quoc-khoi-day-chuyen-de-ne-don-my-20250825172604895.htm