US revokes TSMC's exemption for chip equipment shipments to China: Report

ISTANBUL

The US on Tuesday revoked the Taiwan Semiconductor Manufacturing Corporation's (TSMC) authorization to ship chip equipment to China without a license, according to Bloomberg.

TSMC was recently notified by the US that the Taiwanese chipmaker's validated end user (VEU) status for its location in Nanjing, China would be terminated.

The US made a similar move when it revoked VEU designations for Samsung Electronics Co. and SK Hynix Inc. facilities in China. The waivers will end in around four months.

“TSMC has received notification from the US Government that our VEU authorization for TSMC Nanjing will be revoked effective December 31, 2025,” the company said in a statement.

TSMC said the company had evaluated the situation and taken appropriate measures, including contacting the US, and emphasized that it is determined to ensure the uninterrupted operation at its Nanjing, factory.

Due to Washington's action, TSMC suppliers will no longer have blanket authorization they presently have due to the plant's VEU status. Instead, they will need to request individual licenses anytime they wish to transport semiconductor equipment and other equipment covered by US export restrictions to its Nanjing location.

Some of the biggest corporations in the semiconductor industry, which include Samsung Electronics and SK Hynix, which are also US allies, are putting operations in China at risk as a result of the policy shift.

The change creates ambiguity around wait periods to actually obtain the permits, even though the US has stated that it plans to give licenses required to keep those plants operating, according to a source.

Under the VEU Program, foreign chip manufacturers were allowed to export most US-origin goods, software, and technologies for semiconductor production in China without a license.

The US Commerce Department announced last week that it had closed the loophole in export controls.

The statement noted that companies have 120 days until the license exemption expires, and they must apply for an export license within the period.