TSMC joins South Korean rivals, loses US fast-track export status for China

Washington has revoked TSMC's fast-track status for US chip manufacturing equipment exports to its main plant in China - a move that comes days after revocations of the same privilege for South Korean chipmakers. 

Keen for China not to benefit too much from advanced American technology, US President Donald Trump's administration has been re-examining export controls that it thought were too relaxed under the Biden administration.

TSMC, SK Hynix and Samsung Electronics have, until now, benefited from exemptions to sweeping restrictions that the US has imposed on chip-related exports to China.

The privilege known as validated end user status will end December 31, TSMC said, meaning shipments of American chipmaking tools to its plant in Nanjing after that date will require US export licenses. 

The plant makes 16-nanometre and other mature node chips - not TSMC's most advanced semiconductors. TSMC said in last year's annual report that its Nanjing site generated about 2.4 per cent of overall revenue. 

The world's largest contract chip manufacturer said it was evaluating the situation and communicating with the US government, adding that it remains "committed to ensuring the uninterrupted operations of TSMC Nanjing." Taiwan's Ministry of Economic Affairs also said it will continue to maintain close communication with the US and with TSMC "to monitor developments and provide necessary assistance." 

The Commerce Department said Friday that the US planned to grant license applications to allow foreign companies to operate their existing facilities in China, but not to expand capacity or upgrade technology. 

While shares in SK Hynix and Samsung, which have substantial production facilities in China, sank after their exemptions were revoked, TSMC shares were less affected, trading flat on Wednesday morning.