tsmc china plant faces us chip export ban

2025-06-23 tsmc

Washington, D.C., Monday, 23 June 2025.
the us department of commerce is weighing the cancellation of chip export waivers impacting tsmc’s chinese operations, along with samsung and sk hynix. this decision could ignite the tech war between the us and china. the potential cancellation raises concerns about technology transfer and national security. one industry insider noted that restrictions on us equipment could inadvertently benefit chinese competitors, calling it ‘a gift’.

potential impact on tsmc stock

The proposed restrictions have sparked concerns about the potential impact on TSMC (TSM:NYSE) and the broader semiconductor industry [3][1]. On Friday, TSMC’s ADR (American depositary receipt) fell by 2% following the news [8]. Financial expert Ruan Mu-hua suggests that while the policy’s impact on TSMC might be limited, Samsung and SK Hynix could face more significant repercussions [1][8]. This is because TSMC’s technology is more advanced [alert! ‘this is an inference; the sources don’t explicitly state ‘TSMC’s technology is more advanced.’’]. Concerns remain about disruptions to the global supply chain should a comprehensive technology blockade lead to production halts [8].

assessing manufacturing capacity risks

If the us revokes tsmc’s waivers, the company would need to apply for individual licenses to ship chip-making equipment to its china-based facilities [8]. This shift from automatic waivers to a case-by-case system could extend approval times to three to six months, potentially affecting production schedules and capacity [8]. The white house maintains that this measure aims to align chip equipment permits with china’s regulations on rare earth materials, ensuring a reciprocal approach [5][8]. however, the move is perceived as a means for the us to control the flow of crucial technology to china [5].

geopolitical considerations

The us action is viewed as a pressure test on its allies and could strain relations with south korea and taiwan [7]. Scholar weng li-chung highlights that taiwan and south korea might find it difficult to avoid taking sides in the us-china tech rivalry [7]. however, he stresses the importance of setting limits and being able to say ‘no’ to the us, as complete cooperation could harm taiwan’s economy and global strategy [7]. the us may be leveraging taiwan and south korea’s technological advantages amidst geopolitical tensions [7].

market leadership and competition

tsmc holds a 53% global market share in semiconductor manufacturing, making it a bellwether for the electronics industry [2]. the us restrictions could hinder tsmc’s operations in china, potentially impacting its competitiveness [5]. some analysts fear that these restrictions could inadvertently benefit chinese competitors by prompting them to develop their own technologies or seek alternatives from japan and europe [5][7]. despite these concerns, the us government’s internal divisions and the potential for china to accelerate its own development create uncertainty [7].

broader market context

the potential export ban occurs amidst other significant global events, including us airstrikes against iranian nuclear facilities [1]. these strikes have caused us oil futures to rise by 2.63% to $75.78 per barrel and brent crude oil to increase by 2.51% to $78.94 per barrel [1]. these geopolitical tensions, coupled with ongoing trade disputes, contribute to market volatility and investor uncertainty [1]. jay woods, chief global strategist at freedom capital markets, notes that markets often overreact to conflicts, resulting in exaggerated reactions that may last briefly [1].

Bronnen

chip exports trade restrictions