tsmc hit as us pulls nanjing plant's export waiver

2025-09-03 tsmc

washington, Wednesday, 3 September 2025.
the united states has revoked taiwan semiconductor manufacturing co.’s (tsmc) authorization to freely ship equipment to its nanjing, china, facility. tsmc’s adr fell over 3% in pre-market trading upon the announcement. the decision is expected to weaken the plant’s production capacity. the facility focuses on older generation chips. this action follows similar moves against samsung and sk hynix. the waiver removal goes into effect december 31, 2025. the move signals tightening export controls and raises concerns about global semiconductor supply chain stability.

veU status revoked

The U.S. government has revoked the Validated End User (VEU) status for TSMC’s Nanjing plant [2]. This means that future shipments of American chipmaking tools to the facility will require U.S. export licenses [2]. TSMC has stated its commitment to ensuring uninterrupted operations at the Nanjing plant [2]. The revocation goes into effect on December 31, 2025 [3]. This action aligns with the U.S. revoking similar authorizations for Samsung and SK Hynix’s China-based plants [1].

licensing changes

The revocation of VEU status means TSMC’s suppliers must now actively seek export licenses from the U.S. for items subject to export controls [4]. These items range from advanced manufacturing equipment to spare parts and chemicals used in production [4]. While the U.S. Commerce Department indicated it would still approve license applications to support existing production, it clarified that licenses would not be granted for capacity expansion or tech upgrades [4]. The shift from blanket approvals to case-by-case reviews introduces uncertainty [4].

market reaction

News of the VEU revocation led to a more than 3% drop in TSMC’s American depositary receipts (ADR) in pre-market trading [1][8]. This reflects investor concerns about the potential impact on TSMC’s operations and financial performance [1]. Equipment suppliers like Applied Materials, ASML, and KLA also saw their stock prices decline [8]. The Chinese Commerce Ministry has urged the U.S. to correct its course, stating that the move harms the stability of global semiconductor supply chains [8].

geopolitical implications

The U.S. move is viewed as an effort to tighten control over technology exports to China [8]. It is seen as potentially closing loopholes from previous administrations [8]. This action affects not only TSMC but also Samsung and SK Hynix’s investments in China [8]. The South Korean government has expressed concerns to the U.S., emphasizing the significant production capacity its chipmakers hold in China [4]. Some analysts suggest that South Korean firms might need to rethink their strategies in China and possibly move production back home if approval times for licenses become too long [4].

limited impact?

TSMC’s Nanjing plant manufactures chips using older generation 16-nanometer process technology [1]. The plant’s revenue accounts for a small single-digit percentage of TSMC’s overall revenue [4]. Current U.S. policy does not restrict the export of mature process equipment to China, so the Nanjing plant’s 28-nanometer production line is not immediately affected [4]. However, delays in approvals for equipment maintenance, spare parts, and chemicals could still affect production and operational efficiency [8].

Bronnen

chip exports tsmc nanjing