U.S. Approves Annual Licence for TSMC to Import Chip Tools into China

Post by : Saif

The United States has granted Taiwan Semiconductor Manufacturing Company, widely known as TSMC, an annual licence that allows it to import U.S.-made chipmaking equipment into its factory in Nanjing, China. The decision offers relief to the world’s largest contract chipmaker at a time when global technology rules are becoming tighter and more complex.

TSMC confirmed the approval on Thursday, saying the licence will help keep its factory operations running smoothly and ensure products are delivered without disruption. The company explained that the licence allows U.S. export-controlled equipment to be supplied to its Nanjing plant without the need for separate approvals for each shipment.

This move comes after a key change in U.S. policy. For several years, major Asian chipmakers such as TSMC, Samsung Electronics, and SK Hynix benefited from special exemptions under U.S. export rules. These exemptions, known as “validated end-user” status, allowed them to receive certain U.S. technology for use in China without applying for repeated licences.

However, those exemptions expired on December 31, forcing companies to apply for new export licences for 2026. The U.S. government’s decision to grant annual licences to TSMC and other major firms suggests a desire to balance strict technology controls with the need to avoid sudden shocks to the global semiconductor supply chain.

TSMC’s Nanjing factory does not produce the company’s most advanced chips. Instead, it focuses on 16-nanometre and other mature-node semiconductors, which are widely used in everyday products such as cars, household electronics, and industrial equipment. TSMC also operates another chip plant in Shanghai.

According to TSMC’s 2024 annual report, the Nanjing facility contributed about 2.4% of the company’s total revenue. While this is a small share compared to its advanced factories in Taiwan, the plant still plays an important role in serving customers in China and nearby markets.

The U.S. export controls are part of a broader effort by Washington to limit China’s access to cutting-edge semiconductor technology, which is seen as critical for military, artificial intelligence, and high-performance computing uses. At the same time, U.S. officials have tried to avoid disrupting global chip supplies that many industries depend on.

By issuing annual licences instead of broad exemptions, the U.S. government keeps closer control over what technology enters China, while still allowing established companies like TSMC to maintain stable operations. Similar licences have also been granted to South Korea’s Samsung Electronics and SK Hynix, showing that this approach applies across the industry.

For TSMC, the licence provides certainty for the year ahead. For the global chip market, it signals that while competition between major powers continues, practical steps are still being taken to prevent sudden breaks in supply chains that could affect economies worldwide.

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