tsmc imposes new limitations on chip technology for china
Hsinchu, Wednesday, 19 February 2025.
tsmc has introduced a ‘whitelist’ mechanism to comply with us department of commerce regulations, limiting technology access for chinese clients. the restriction applies to products below 16 nm. this decision aligns with us policy and highlights ongoing geopolitical tensions. the move is likely to influence tsmc’s market strategy and its relationships with investors. chinese companies will need to have their chips packaged by entities on the recognized whitelist from the us. this development showcases how regulatory actions are shaping the semiconductor landscape, as tsmc navigates complex international trade dynamics.
Implementation of packaging restrictions
TSMC has notified Chinese customers that effective January 31, 2025, all products using 16nm technology or below must be packaged by companies approved on the Bureau of Industry and Security (BIS) whitelist [3]. The approved list includes 24 companies, with nine Taiwanese firms making the cut, while notably excluding all Chinese packaging companies [3]. This restriction stems from the US Commerce Department’s latest measures aimed at preventing advanced chips from reaching China [3].
Market impact and order shifts
The exclusion of Chinese packaging firms has triggered a wave of inquiries to Taiwanese companies for potential order transfers [3]. Major companies like AMD face challenges as their primary packaging partner, China’s TongFu Microelectronics, is not on the whitelist [3]. Industry experts note that while order transfers are occurring, the actual impact needs careful assessment, as Chinese customers’ share in sub-16nm technology remains uncertain [3].
Strategic implications
The policy shift occurs amid intensifying US-China competition in AI development [3]. TSMC’s Nanjing facility, which produces 16nm chips for Chinese clients including Huawei and BYD, will be directly affected by these regulations [3]. This move aligns with broader US efforts to maintain technological advantages, particularly as Chinese companies like DeepSeek demonstrate advancing AI capabilities [3].
Future outlook
As TSMC navigates these complex regulations, the company’s Japan subsidiary JASM has begun mass production at its Kumamoto facility [4]. Market analysts are closely monitoring whether the Trump administration might implement additional measures to prevent China from accessing advanced technologies [3]. The semiconductor industry anticipates potential further restrictions as geopolitical tensions continue to influence global supply chains [4].