The United States government has revoked Taiwan Semiconductor Manufacturing Co’s (TSMC) authorization to ship certain equipment to its Nanjing plant in China, ending its validated end user (VEU) status.

The waiver for TSMC’s Nanjing facility will expire by December 31, 2025, after which the company and its suppliers will need specific US licenses to export restricted goods.

This move follows similar actions taken against Samsung Electronics and SK Hynix’s China operations, as the US seeks to tighten semiconductor export controls.

US officials said the change aims to address “export control loopholes,” introducing individual licensing requirements instead of blanket permissions.

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🔗 Source: Taipei Times

🧠 Food for thought

1️⃣ Administrative friction becomes a policy weapon in tech competition

The US shift from blanket waivers to individual licenses demonstrates how bureaucratic processes can serve as strategic tools without imposing outright bans.

The revocation will generate approximately 1,000 additional license applications annually for the affected companies, creating significant administrative burden2.

This approach allows US officials to maintain influence while avoiding the appearance of complete technology blockades that could trigger stronger diplomatic responses.

The timing uncertainty inherent in case-by-case reviews can disrupt production planning and supplier relationships, even if most licenses are eventually approved.

Companies now face the challenge of managing longer lead times and increased compliance costs, potentially making their Chinese operations less competitive compared to facilities in other regions.

2️⃣ Supply chain chokepoints reveal unexpected geopolitical leverage

The semiconductor equipment supply chain gives the US remarkable influence over global chip production, even for foreign companies operating in third countries.

Despite TSMC, Samsung, and SK Hynix being non-American companies running facilities in China, US export controls can still disrupt their operations because they rely on American-made equipment and components1.

This control extends beyond just advanced manufacturing gear to include spare parts and chemicals consumed in production processes, creating multiple pressure points throughout the supply chain1.

The situation demonstrates how technological dependencies built over decades can become geopolitical assets, allowing one country to influence industrial activities worldwide.

Even TSMC’s relatively small 3% exposure through its Nanjing facility shows how integrated global supply chains can create vulnerabilities that extend far beyond a company’s primary operations3.

Recent TSMC developments

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