• The US has revoked TSMC's Validated End User (VEU) status for exports to its Nanjing facility, effective December 31, 2025.
• This decision requires TSMC to apply for individual licenses to ship American-made chip equipment to China.
• The revocation is part of broader US efforts to tighten export controls on technology destined for China.
• Similar measures have also been taken against South Korean firms Samsung and SK Hynix.
• TSMC emphasized its commitment to ensuring uninterrupted operations in Nanjing amid the uncertainty.

The US government has revoked Taiwan Semiconductor Manufacturing Company's (TSMC) authorization to ship essential chip manufacturing equipment to its Nanjing facility in China, removing its Validated End User (VEU) status. This status allowed TSMC backdoor permissions for exports, meaning future shipments will require individual licenses, thereby complicating operational logistics for the company. This revocation is effective December 31, 2025, according to a statement from TSMC, which is also the world's largest contract chip manufacturer. The company has signaled its intention to cooperate with the US government while maintaining operations in Nanjing, which produces older-generation chips contributing approximately 2.4% of its overall revenue, according to Reuters, South China Morning Post, Anadolu Agency, Channel News Asia, BBC, and India Times.

This regulatory shift is reflective of broader political strategy, where Washington aims to curb Beijing's access to American technology deemed crucial for enhancing China's technological capabilities. Under the recent changes, similar statuses were revoked for South Korean companies Samsung and SK Hynix, whose Chinese operations will also face licensing requirements for exports, intensifying scrutiny on semiconductor supply chains across the region. The move appears timed with ongoing trade negotiations between the US and China, as suggested by officials, particularly given that the losses in fast-track export privileges may provoke significant delays in shipments, according to Reuters, South China Morning Post, Anadolu Agency, Channel News Asia, BBC, and India Times.

Furthermore, chip analysts express concern that these heightened restrictions may lead to increased costs for TSMC and its suppliers as individual licenses introduce delays and complexities to the supply chain. Investment specialists have indicated that while TSMC's operations in Nanjing are not its primary focus, the overall impact may still be restrictive as equipment shortages could disrupt supply lines. With these developments, the future of semiconductor manufacturing in China appears uncertain as companies like TSMC navigate the increasingly complex regulatory landscape imposed by US foreign policy, according to Reuters, South China Morning Post, Anadolu Agency, Channel News Asia, BBC, and India Times.