The United States has revoked Taiwan Semiconductor Manufacturing Company’s (TSMC) special fast-track status for exporting U.S. chipmaking equipment to its plant in Nanjing, China, in a move that highlights Washington’s effort to limit Beijing’s access to advanced technology.
The decision follows similar revocations for South Korean chip giants Samsung Electronics and SK Hynix. Under the new directive, TSMC will lose its “validated end user” privilege by December 31, after which shipments of U.S. equipment to the facility will require export licenses.
TSMC, the world’s largest contract chipmaker, stressed that the Nanjing plant produces only mature node chips such as 16-nanometre semiconductors, not its most advanced products, and accounts for about 2.4 percent of its overall revenue.
The company said it is evaluating the situation, maintaining communication with U.S. authorities, and remains committed to uninterrupted operations at the Chinese facility. Taiwan’s Ministry of Economic Affairs also pledged to monitor developments closely and provide necessary assistance to TSMC.
The U.S. Commerce Department clarified that while licenses would likely be granted to allow foreign companies to sustain existing facilities in China, approvals would not extend to expansion or technology upgrades.
Analysts said the licensing change is expected to hit American equipment suppliers such as KLA, Lam Research, and Applied Materials by curtailing their sales to China. Shares in SK Hynix and Samsung dipped following the policy shift, though TSMC stock remained largely unaffected.
Industry observers say Chinese chip equipment makers are unlikely to see significant gains from the policy change, as most expansion projects in China have already been completed. However, the development could open opportunities for local suppliers to provide maintenance and replacement components for U.S.-made machines already operating in Chinese facilities.
Analysts warn that the restrictions further entrench the divide in the global semiconductor industry, as Washington seeks to prevent China from advancing its chipmaking capacity.