Amid the growing tension in the global semiconductor war, the United States of America has revoked the license of the Taiwan Semiconductor Manufacturing Co. (TSMC) to send advanced chip-making tools to China. This comes after Washington had earlier allowed NVIDIA and AMD to export certain AI chips to its rival, signaling a possible shift in strategy.
US revokes VEU status of TSMC, SK Hynix, and Samsung
The United States has revoked a waiver that allows TSMC to send advanced chip manufacturing equipment and technology to its Nanjing plant in China. This decision will be effective from December 31st this year. Because of the removal of the waiver, the company also loses its Validated End Users (VEU) status that gives it a fast-track way for export clearance.
The other two chip manufacturing companies, Samsung and SK Hynix, will also lose their VEU status soon. Now, any export of the US-origin chip tools to China will require an export license . The Bureau of Industry and Security claims that this move fixes what it calls a “Biden-era loophole.”
Companies may apply for an export license to China, but the freedom won’t be the same
Industry analysts add that the financial impact of this move on TSMC will remain negligible. TSMC’s shares remained unaffected by this announcement. However, the shares of SK Hynix and Samsung did notice a slight decline.
The Nanjing plant of TSMC, despite having an advanced production tech , contributes less than three per cent of the global revenue of the company. The tech giant, on the other hand, adds that it would take “appropriate measures” while keeping operations at its Chinese plant uninterrupted.
This move is a part of Washington’s plan to strengthen the local chip market. It wants companies to avoid expanding their footprint in China and develop more semiconductor know-how in the US. The Trump administration remains committed to strengthening the region’s leadership in this industry.
