TSMC Secures One-Year US Export License To Keep China Chip Operations Running: Report

Taiwan Semiconductor Manufacturing Co. (NYSE:TSM) has secured a one-year U.S. export license allowing it to import the U.S. chipmaking equipment into its China operations.

US Grants Annual License For TSMC's China Operations

On Thursday, TSMC said the U.S. Department of Commerce has approved an annual export license covering its Nanjing fabrication plant, reported Reuters.

This allows U.S.-controlled equipment to be supplied without requiring separate approvals from individual vendors. 

The company told the publication that the license will help maintain uninterrupted manufacturing operations and ensure timely product deliveries.

See Also: Taiwan Semiconductor Starts Making Its Most Powerful Chips At Scale

Policy Shift Follows Expiry Of Longstanding Exemptions

The approval comes after Washington allowed special exemptions — known as validated end-user status — for select foreign chipmakers operating in China to expire at the end of December.

Under the new framework, companies must apply for export licenses regularly rather than rely on broad, open-ended waivers.

South Korea's Samsung Electronics Co. Ltd. (OTC:SSNLF) and SK Hynix have also received similar licenses.

Focus Remains On Limiting Advanced Chip Capabilities

TSMC's Nanjing facility produces 16-nanometer and other mature-node chips, not the company's most advanced semiconductors. TSMC also operates a separate chip plant in Shanghai.

U.S. export controls are designed to curb China's access to advanced semiconductor technology while minimizing disruption to global supply chains and allied firms.

Limited Financial Impact For TSMC

In its 2024 annual report, TSMC said its Nanjing operations accounted for about 2.4% of total revenue.

Meanwhile, TSMC has come under investor scrutiny after a magnitude 7.0 earthquake off northeastern Taiwan triggered precautionary measures at several of its facilities, raising concerns about potential production disruptions.

The $1.28 trillion chip giant has gained more than 46% over the past year, buoyed by strong demand driven by its role as a major supplier to Nvidia Corp. (NASDAQ:NVDA) and Apple Inc. (NASDAQ:AAPL).

Benzinga Edge Stock Rankings indicate that TSMC is showing a solid price trend across the short, medium and long-term time frames, with deeper performance insights available here.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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