U.S. Gov't Revokes TSMC's Authorization to Ship Tools to its Fabs in China
upstart writes:
But TSMC vows to continue making chips on the mainland:
The U.S. has decided to revoke its special allowance for TSMC to export advanced chipmaking tools from the U.S. to its Fab 16 in Nanjing, China, by the end of the year. The decision will force the company's American suppliers to get individual government approvals for future shipments. If approvals are not granted on time, this could could affect the plant's operations.
Until now, TSMC benefited from a general approval system - enabled by its validated end-user (VEU) status with the U.S. government - that allowed routine shipments of tools produced by American companies like Applied Materials, KLA, and LAM Research without delay. Once the rule change takes effect, any covered tool, spare part, or chemical sent to the site will need to pass a separate U.S. export review, which will be made with a presumption of denial.
"TSMC has received notification from the U.S. government that our VEU authorization for TSMC Nanjing will be revoked effective December 31, 2025," a statement by TSMC sent to Tom's Hardware reads. "While we are evaluating the situation and taking appropriate measures, including communicating with the U.S. government, we remain fully committed to ensuring the uninterrupted operation of TSMC Nanjing."
TSMC currently operates two fabs in China: a 200-mm Fab 10 in Shanghai, and a 300-mm Fab 16 in Nanjing. The 200-mm fab produces chips on legacy process technologies (such as 150nm and less advanced) and flies below the U.S. government's radar. By contrast, the 300-mm semiconductor production facility makes a variety of chips (e.g., automotive chips, 5G RF components, consumer SoCs, etc.) on TSMC's 12nm FinFET, 16nm FinFET, and 28nm-class production nodes and logic technologies of 16nm and below are restricted by the U.S. government even though they debuted about 10 years ago.
[...] One of the ways for TSMC to keep its Fab 16 in Nanjing running without U.S. equipment is to replace some of the tools it imports from the U.S. with similar equipment produced in China. However, it is unclear whether it is possible, particularly for lithography.
[...] In a normal situation, TSMC would likely resist such disruption, especially for legacy nodes meant to be cost-effective, but it may be forced to switch at least some of its tools even despite the fact that it cannot fully replace American and European tools at its Fab 16 in China.
[...] If TSMC is forced to halt or drastically reduce output at its Nanjing Fab 16, the ripple effects would be favorable to Chinese foundries like SMIC and Hua Hong as China-based customers will have to reallocate their production to SMIC (which offers 14nm and 28nm) or HuaHong (which has a 28nm node), which will boost their utilization and balance sheet (assuming of course they have enough capacity).
Furthermore, a forced TSMC slowdown in China will validate People's Republic's push for semiconductor self-sufficiency, which could mean increased subsidies for chipmakers and tool makers.
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