us export controls shake semiconductor sector
Washington D.C., Friday, 7 February 2025.
Recent US export controls on China’s chip sector have created significant turbulence within the semiconductor industry. The restrictions have notably affected companies such as the Taiwan Semiconductor Manufacturing Company (TSMC). These measures are sparking concerns about rising market volatility and potential shifts in stock valuations. This unexpected level of disruption highlights the broader implications of geopolitical tensions on global tech industries. Analysts predict that affected companies may need to adjust supply chains and seek alternative solutions to mitigate these impacts. The ongoing situation underscores the complex challenges facing the semiconductor market, which relies heavily on international collaboration. As companies navigate these new hurdles, the future landscape of the industry remains uncertain, with potential for further shifts as global trade policies evolve. The unfolding scenario is a stark reminder of the intricate dependencies and vulnerabilities within the global tech supply chain.
Malaysian compliance and export control measures
Malaysia has firmly denied allegations of being a transit point for smuggling Nvidia AI chips to China [2]. The country’s Minister of Investment, Trade and Industry, Tengku Zafrul Abdul Aziz, emphasized Malaysia’s strict adherence to international export control regulations under the Strategic Trade Act [2]. The Malaysian government’s stance aligns with control measures implemented by the United States, European Union, and United Kingdom [2], demonstrating the global reach of semiconductor trade restrictions.
TSMC’s response to tightening controls
TSMC has implemented stringent measures affecting Chinese IC design companies as of January 31, 2025 [5]. The company now requires certification for packaging processes at approved facilities for chips at 16/14 nanometer nodes and below [5]. This policy shift has particularly impacted companies without existing relationships with approved packaging facilities, leading to potential delivery delays [5].
ASML’s market dynamics
The semiconductor equipment landscape has seen significant shifts, with China emerging as ASML’s largest customer [4]. ASML’s 2024 revenue reached €28.3 billion, with Chinese sales accounting for 41% of system equipment revenue, surpassing both South Korea at 21% and the United States at 17% [4]. However, restrictions remain on the most advanced machines, with EUV equipment completely banned from Chinese sales [4].