A 300mm wafer on display at the booth of Taiwan Semiconductor Manufacturing Company during the 2023 World Semiconductor Conference at Nanjing International Expo Center on July 19, 2023, in Nanjing, China.
The U.S. has revoked a waiver that allowed Taiwan Semiconductor Manufacturing Co. to export key chipmaking equipment and technology to its manufacturing plant in Nanjing, China, as Washington continues to ramp up efforts to limit Beijing's semiconductor advancement.
The change will remove a fast-track export privilege known as validated end user (VEU) status, effective Dec. 31, TSMC confirmed to CNBC on Wednesday.
The world's largest contract chipmaker had received the exemption soon after the Commerce Department launched its initial restrictions on the sale of U.S.-origin chipmaking tools in 2022.
Under the new policy, shipments of chipmaking tools with American origins to TSMC's manufacturing facilities in Nanjing, China, will require U.S. export licenses.
"While we are evaluating the situation and taking appropriate measures, including communicating with the US government, we remain fully committed to ensuring the uninterrupted operation of TSMC Nanjing," the company said.
South Korean memory chipmakers SK Hynix and Samsung also had their VEU privileges revoked on Friday, according to a statement on the Federal Register. Both companies run China-based memory chip facilities.
At the same time, the Department of Commerce's Bureau of Industry and Security said in a statement that it was closing the VEU "Biden-era loophole" for all foreign semiconductor manufacturers.
It added that it intends to grant export license applications to allow former VEU participants to operate their existing manufacturing facilities in China, but not to expand capacity or upgrade technology in China.
Jeffrey Kessler, under secretary of commerce for industry and security, stated that the Trump administration is "committed to closing export control loopholes — particularly those that put U.S. companies at a competitive disadvantage. Today's decision is an important step towards fulfilling this commitment."
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