U.S. grants TSMC annual licence to import U.S. chipmaking tools into China

The U.S. government has issued an annual licence allowing Taiwan Semiconductor Manufacturing Company (TSMC) to import U.S.-made chip manufacturing equipment into its facilities in Nanjing, China, the company confirmed on Thursday. TSMC said the approval will help ensure uninterrupted factory operations and the timely delivery of its products.

Similar licences have also been granted to South Korea’s Samsung Electronics and SK Hynix, which operate semiconductor manufacturing plants in China.

Before, Asian semiconductor manufacturers were counting on exceptions from U.S. government export restrictions covering chip technology sold to China, and these exceptions were part of a U.S. Government strategy to ensure that America maintains a technological lead over China. With the exception of the validated end-user status expiring on December 31, 2022, these companies will now have to apply for export licenses for the year 2026 in order to ship products to China.

As stated by TSMC, the U.S. Department of Commerce has issued an annual export license for TSMC’s Nanjing facility, allowing TSMC to ship all U.S. Government export controlled equipment to its Nanjing facility without applying to each individual vendor for approval to ship the equipment to the facility. TSMC also reiterated that the primary purpose of the export license is to ensure the smooth operation of the manufacturing process and to prevent disruptions to the flow of products to TSMC customers.

The semiconductor manufacturing plant operated by TSMC (Taiwan Semiconductor Manufacturing Company) in Nanjing is primarily focused on producing chips that are classified as being at a "mature node" (such as 16 nm), or less sophisticated than Advanced technology nodes. Additionally to the plant in Nanjing, TSMC has another chip-making plant in Shanghai.

According to TSMC's annual report published in 2024, the revenue associated with the Nanjing plant represented approximately 2.4 percent of TSMC’s total revenue. This indicates that the Nanjing manufacturing facility is strategically important to TSMC within the overall manufacturing network of TSMC around the world, but it does not represent anything close to the majority of their revenue within TSMC's current business structure and operations.

This announcement shows how larger semiconductor manufacturers are changing their operation strategies in regards to U.S. restrictions on exports as well as the evolving geopolitical tensions and increased technological tensions between the United States and China, but also while still attempting to maintain stable operations in China.