Following reports that the US government had granted annual export licenses to South Korea's Samsung Electronics and SK Hynix, the US Department of Commerce (DOC) has also approved TSMC to export chip manufacturing equipment containing US technology to its wafer fabs in Nanjing and other locations in China over the next year. The approval ensures existing production lines can continue operating normally and meet product delivery schedules.
According to Reuters, the South China Morning Post, and Tom's Hardware, this signals a shift in US-China tech competition strategy. It indicates that the US is aiming to curb China's tech development while still allowing allied companies to legally operate in the Chinese market. These three major chipmakers previously benefited from Validated End-User (VEU) status, which exempted them from applying for individual licenses each time. That privilege expired at the end of 2025. Companies now must seek annual approval from the US government.
TSMC's Nanjing operations continue
TSMC stated that the new annual license from the DOC ensures uninterrupted operations at its Nanjing fab. The facility primarily produces 16-nanometer and other mature process chips, accounting for roughly 2.4% of TSMC's total revenue. TSMC also operates a wafer fab in Shanghai. Meanwhile, the Netherlands' ASML, which is the world's only supplier of mass-producible advanced extreme ultraviolet (EUV) lithography equipment, remains prohibited from exporting to China or providing related maintenance services. This is intended to keep Chinese wafer production at relatively mature process nodes.
China pushes self-sufficiency amid restrictions
In response, China has been actively promoting semiconductor self-sufficiency. This includes requiring that at least half of any new domestic capacity uses locally made equipment. Reports suggest attempts to reverse-engineer EUV tools domestically. However, China has yet to achieve mass production, leaving it several years behind competitors in advanced process equipment.
Article edited by Jerry Chen
