US Revokes TSMC Waiver for China Chip Equipment

The United States government has revoked Taiwan Semiconductor Manufacturing Co.’s (TSMC) authorization to freely ship US-made chipmaking equipment to its Nanjing, China facility, effective December 31, 2025.

The move, part of Washington’s tightening export controls, could create supply challenges for TSMC, though analysts note its limited impact compared to Korean rivals. According to Macquarie Group, if license approvals are delayed, TSMC’s Nanjing plant could face operational disruptions within months due to equipment shortages. To mitigate risks, TSMC may redirect orders from its Japanese plant and stockpile spare parts ahead of the deadline, said Morningstar analyst Phelix Lee.

Key Highlights

• US revokes TSMC’s authorization to ship US-made equipment to Nanjing
• Impact on TSMC minimal as Nanjing makes only 3 percent of capacity in low-margin chips
• SK Hynix and Samsung face greater risks with major China-based production

The Nanjing site accounts for only 3 percent of TSMC’s total capacity, producing lower-margin 16nm and 28nm chips, meaning the financial impact will be relatively minor. In contrast, SK Hynix and Samsung Electronics face far greater consequences, as about 30 percent of SK Hynix’s DRAM/NAND output and over a third of Samsung’s DRAM production are based in China. Shares of SK Hynix fell 4.4 percent and Samsung dropped 2.3 percent following the announcement.

Analysts highlight how geographic production strategies determine vulnerability to geopolitical restrictions in the semiconductor sector. The export control echoes the 1986 US-Japan Semiconductor Agreement, though the new measures are more targeted.

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Instead of blanket import restrictions, the US is focusing on export licensing for equipment, allowing existing operations while blocking capacity expansion. This calibrated approach aims to curb China’s semiconductor growth without directly inflating chip prices for US buyers.