The Donald Trump administration has also barred Taiwan's TSMC from bringing equipment into its semiconductor plants in China, following actions against Samsung Electronics and SK hynix. As a result, the three companies are expected to face operational disruptions at their production facilities in China starting next year.
Bloomberg reported on the 2nd (local time) that U.S. government officials informed TSMC of their decision to withdraw the 'verified end user (VEU)' status for its Nanjing plant in China. The VEU is a type of blanket approval that allows exports of designated items only to corporations that have been pre-approved by the U.S. government. Thanks to its VEU designation, TSMC's Nanjing plant has not needed to obtain individual approvals for importing semiconductor equipment into China since the U.S. government began controlling exports to China in October 2022. However, once VEU status is revoked, the comprehensive approval to import U.S. semiconductor equipment will disappear.
TSMC stated, "We have been notified by the U.S. government that the VEU authorization for our Nanjing plant will be revoked as of Dec. 31, 2025. We are fully committed to ensuring the uninterrupted operation of the Nanjing plant while assessing the situation and taking appropriate actions, including communication with the U.S. government."
Earlier, on the 29th of last month, the U.S. government announced the withdrawal of VEU designation for Samsung Electronics and SK hynix's plants in China. The U.S. Department of Commerce officially published the decision to withdraw VEU designation for Samsung Electronics and SK hynix in the government gazette that day. With the withdrawal of TSMC's VEU status, Samsung Electronics, SK hynix, and TSMC will have to apply for permission from the U.S. government every time they import equipment subject to export controls designated by the U.S. government starting next year.
According to Bloomberg, the proportion of TSMC's production in China is relatively small compared to Samsung Electronics and SK hynix. TSMC started operating its Nanjing plant in 2018 and currently focuses on the 16nm process. The 16nm technology has been commercialized for over 10 years and accounts for a negligible portion of TSMC's total revenue. Therefore, the impact of the U.S. mandate for individual approvals is expected to be greater for Samsung Electronics and SK hynix than for TSMC.