us tightens grip: china fabs face new chip tool restrictions
Washington, Monday, 23 June 2025.
the us government is escalating its efforts to slow china’s semiconductor industry. new restrictions target tsmc, samsung, and sk hynix, potentially blocking them from installing advanced chipmaking tools in their chinese fabs. this move aims to impede china’s access to cutting-edge technology. taiwan’s tsmc profits more from its china based fabs than from its fabs in the US. the restrictions could shift the balance of power in the global semiconductor market.
Restrictions Target Top Chip Manufacturers
The US government is implementing new restrictions that could prevent leading semiconductor manufacturers like TSMC, Samsung, and SK Hynix from installing advanced chipmaking tools in their fabs located in China. [1] This move is seen as an effort to curb China’s access to cutting-edge chip technology and maintain the US’s technological edge in the global semiconductor industry. [1]
Potential Impact on Global Supply Chains
The restrictions could disrupt global chip supply chains, as these manufacturers’ China-based facilities are critical components of the global storage, logic, and other chip supply networks. [1] While these facilities may not have the most advanced technology, their outputs are widely used in automotive, consumer electronics, and other industries. [1] Industry experts warn that the tighter US restrictions may not immediately force these plants to shut down, but over time, they could find effective operation increasingly difficult. [1]
Tensions with Allies and Trading Partners
The potential policy change has already raised concerns in South Korea and Taiwan, whose companies would be directly impacted. [2][3] South Korea’s trade negotiator expressed worries about the US potentially restricting chip manufacturers, and said he would convey industry concerns during upcoming trade talks. [3] Taiwan media speculated that the move could be seen as a betrayal of the recent US-China trade truce established in London. [2]
Shift in Semiconductor Profitability
The restrictions could shift the balance of power in the global semiconductor market. TSMC, for example, generates more profits from its China-based fabs than its US facilities. [1] Meanwhile, South Korean companies like Samsung and SK Hynix have significant manufacturing operations in China that are critical to their global supply chains. [1][3] The potential loss of US technology access could severely impact the competitiveness of these Asian chipmakers against Chinese rivals. [1][3]