The Trump administration has revoked Taiwan Semiconductor Manufacturing Company’s permit to export chips from the US to China.
Taiwan Semiconductor Manufacturing Company’s (TSMC) authorisation to ship US technology products freely to China has been revoked by Washington. The semiconductor giant confirmed on Wednesday that the US government’s decision will take effect on 31 December 2025.
The removal of TSMC’s validated end user (VEU) status comes shortly after South Korea’s Samsung and SK Hynix faced similar restrictions. All three firms will be required to apply for export licences before sending US equipment over to Chinese factories.
TSMC bosses are believed to be evaluating the situation and are in communication with the US government. The firm has also pledged to maintain uninterrupted operations at its Nanjing facility, based in Jiangsu province, China.
On Friday, the US Commerce Department’s Bureau of Industry and Security said that former VEU participants will have 120 days after the new rule is published in the Federal Register to apply for and receive export licenses.
However, while the bureau plans to grant licenses to allow these businesses to run existing China-based plants, it does not plan to issue licences for them “to expand capacity or upgrade technology.”
How will TSMC be affected by the VEU removal?
The US decision to remove TSMC’s licence-free authorisation will affect the company’s China operations. It could further complicate supply chain networks while also leading to increased administrative costs and longer delivery times.
This is because, without automatic authorisation, TSMC and suppliers must apply for licences each time equipment is shipped out. Currently, it is unclear as to how quickly such licences may be approved going forward.
However, it is not expected to have any major impact on the firm’s global dominance. TSMC ranks among the world’s ten most valuable companies by market capitalisation. In July, it became the first Asian company to reach a market value of $1 trillion.
Also, TSMC’s Nanjing site manufactures older-generation chips, which only accounts for around 3% of its overall output. Its most advanced semiconductor production remains centred in Taiwan and the United States.
Whereas TSMC’s Chinese output is relatively minor, Samsung and SK Hynix operate much larger facilities. Their China-based production sites form a more significant portion of their global manufacturing capacity.
Trump continues to restrict semiconductor exports
The US administration under Donald Trump has steadily tightened controls on the export of semiconductor technology to China. Last month, the president revealed new plans to introduce a 100% tariff on all foreign-made semiconductors.
This latest move from the US comes against the backdrop of trade talks taking place between Washington and Beijing. Earlier this year, both sides agreed to temporarily reduce tariffs for 90 days to calm tensions.
White House officials have so far adopted a selective approach, relaxing restrictions for some AI chip exports. Firms like Nvidia and AMD have secured approvals in exchange for financial arrangements with the US government.
Today’s development highlights escalating competition in the semiconductor industry. Both the US and China are working to strengthen control over critical technology, with export restrictions forming part of this ongoing struggle.
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