us weighs action against tsmc's china operations
Washington, Saturday, 21 June 2025.
the us commerce department may revoke waivers allowing tsmc and others to use us tech in china. this could cripple tsmc’s china-based manufacturing and further disrupt the semiconductor supply chain. the potential policy shift sent tsmc’s adr plummeting and triggered a broad sell-off in semiconductor stocks. analysts are closely watching how tsmc navigates this challenge. the decision is not final and faces internal opposition, with concerns it could ultimately benefit china.
Potential impact on manufacturing
The waivers currently allow TSMC, Samsung, and SK Hynix to import American-made semiconductor equipment into their chinese factories without needing individual licenses [1]. The revocation of these waivers could make it more difficult for these chipmakers to operate in china [3]. Industry experts suggest that while the restrictions may not immediately force factory closures, they could significantly impede operations over time [1]. Companies might need to seek individual licenses from the us government for equipment supply or explore alternative equipment from japan and europe [1].
Geopolitical considerations
This potential action occurs amidst ongoing us efforts to curb china’s technological advancements and maintain a competitive edge in the semiconductor industry [2]. The us official, jeffrey kessler, under secretary of commerce for industry and security, reportedly communicated the intention to revoke the exemptions to major chipmakers [1][2]. Some analysts believe that this move could strain relations between the us, south korea, and taiwan, potentially seen as a betrayal of recent trade agreements [5]. It also aligns with the us policy of encouraging manufacturing to return to america, as tsmc, samsung, and sk hynix have been investing in us-based facilities [5].
Market reaction and stock performance
News of the potential waiver revocation led to a decline in semiconductor stocks [5]. On friday, the tsmc adr fell nearly 2% [4]. The philadelphia semiconductor index also experienced a drop [5]. Semiconductor equipment suppliers such as kla, lam research, and applied materials saw their stocks decline as well [3]. This market reaction reflects investor concerns about the potential disruption to tsmc’s operations and the broader implications for the semiconductor industry [1].
Alternative strategies and future outlook
In response to these potential restrictions, affected companies might explore alternative manufacturing locations or seek new technological solutions [2]. They may also apply for individual licenses to continue supplying their chinese factories [1]. The us government insists that chipmakers can still operate in china, but they will face the same licensing requirements as other semiconductor companies exporting to china [1]. The situation remains fluid, with internal opposition within the us government regarding the revocation of waivers [5].