U.S Export Curbs Hit TSMC, Stock Drops Almost 2%

Bloomberg reported that the United States has revoked Taiwan Semiconductor Manufacturing Co.’s authorization to freely ship essential gear to its main Chinese chipmaking base, potentially curtailing production capabilities at that older-generation facility. The waivers are set to expire in about four months.

TSMC confirmed that it had received notice from the U.S. government: the VEU authorization for its Nanjing plant will be withdrawn effective December 31, 2025.

TSMC shares fell nearly 2%, while U.S. semiconductor stocks broadly declined.

The VEU (Verified End-User) program is a certification system established by the U.S. Commerce Department to manage exports of sensitive products. Companies with VEU status are deemed trusted end-users, able to import designated controlled items—such as semiconductor equipment and technologies—without applying for separate licenses.

The revocation means TSMC’s suppliers will need to apply for individual approvals when shipping U.S.-controlled semiconductor equipment to the Nanjing plant, instead of relying on the facility’s blanket VEU authorization.

This move mirrors Washington’s decision in late August to revoke VEU status for Samsung Electronics and SK Hynix’s Chinese facilities. These firms must now seek case-by-case approval to continue importing U.S. semiconductor equipment.

The Commerce Department has said it will grant licenses to ensure existing facilities remain operational, but will not permit capacity expansion or advanced technology upgrades.

Without VEU authorization, TSMC, Samsung, and SK Hynix’s operations in China face growing difficulties. There is already a significant backlog of license requests; revoking China’s VEU status adds about 1,000 additional applications annually, straining U.S. administrative capacity.

Delays could threaten companies’ ability to sustain production.

TSMC’s Nanjing plant, which began production in 2018, contributes only a small portion of the company’s overall revenue. Its most advanced process at the site is 16nm.

In Q1 2025, revenue from mainland China accounted for 7% of TSMC’s total sales, a share that has been declining in recent years.

Separately, reports suggest TSMC will avoid using any Chinese equipment in its 2nm production lines to sidestep potential U.S. restrictions.

Rumors also indicate that Nvidia CEO Jensen Huang’s recent visit to TSMC was linked to pressure from former President Trump, seeking profit-sharing similar to earlier demands that Nvidia and AMD surrender 15% of China-related revenue.