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Breaking! The US revokes semiconductor equipment exemption for TSMC's mainland China factory
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Industry News
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Release time:
2025-09-04
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On September 3rd, according to Lianhe Zaobao citing foreign media reports, the United States has revoked TSMC's license to freely ship key equipment to its main chip manufacturing base in mainland China.
According to Bloomberg, U.S. officials have recently notified TSMC of the decision to terminate the so-called "Verified End User" (VEU) status for the Taiwanese chipmaker's Nanjing factory. This move is consistent with the U.S. previously revoking the VEU status of Samsung Electronics and SK Hynix's mainland factories. These exemptions are expected to expire in about four months.
The "Verified End User" (VEU) system was established by the U.S. Department of Commerce's Bureau of Industry and Security (BIS). It aims to simplify export processes for foreign end users considered trustworthy and low-risk. Companies listed on the VEU list can import specified controlled items (including semiconductor equipment and technology) from the U.S. without separately applying for export licenses.
TSMC currently has one 12-inch fab in Nanjing, mainland China, producing 16nm and 12nm process technologies, and one 8-inch fab in Songjiang, Shanghai, focusing on 0.13 micron and 0.18 micron process technologies.
After the revocation of VEU status, the operation of TSMC's Nanjing factory may face some challenges, such as decreased supply chain efficiency, regulated capacity expansion and technology upgrades, and increased time and administrative costs due to license application processes.
According to TVBS News, TSMC issued a statement saying: "The company has received notification from the U.S. government that TSMC Nanjing's VEU authorization will be officially revoked on December 31, 2025. We are assessing the situation and taking appropriate measures, including maintaining communication with the U.S. government, but TSMC will continue to fully ensure the ongoing operation of the Nanjing factory."
Affected by this news, TSMC's American Depositary Receipts (ADRs) listed in the U.S. fell 2.3% on Tuesday (September 2).
This move by the U.S. means that TSMC's suppliers must apply for approval one by one to ship U.S. export-controlled semiconductor equipment and other materials to the Nanjing factory.
This policy change threatens the operations in China of several of the semiconductor industry's most important companies, which come from two major global chip hubs and are also U.S. allies. Although U.S. officials say they will issue licenses necessary to maintain the operation of related facilities, there remains uncertainty about the actual approval waiting times.
Bloomberg quoted informed sources saying that officials are seeking solutions to reduce administrative burdens, especially given the current significant backlog in license applications.
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