The U.S. makes it harder for TSMC, SK Hynix and Samsung to produce chips in China

Core Viewpoint - The U.S. has revoked the validated end user (VEU) status for Taiwan Semiconductor Manufacturing Co. (TSMC) and other foreign semiconductor manufacturers, impacting their ability to export key chipmaking equipment and technology to China, particularly TSMC's facility in Nanjing [1][2][4]. Group 1: Policy Changes - The revocation of VEU status will take effect on December 31, requiring TSMC to obtain U.S. export licenses for shipments of American-origin chipmaking tools to its Nanjing facility [2]. - The U.S. Department of Commerce is closing the "Biden-era loophole" for all foreign semiconductor manufacturers, allowing former VEU participants to operate existing facilities in China but prohibiting capacity expansion or technology upgrades [4]. Group 2: Impact on Companies - TSMC has stated its commitment to ensuring the uninterrupted operation of its Nanjing facility while evaluating the situation and communicating with the U.S. government [3]. - The Nanjing facility contributes less than 3% of TSMC's total revenue and represents a minor share of its global capacity, suggesting that the financial impact on TSMC should be minor [6]. Group 3: Industry Context - The policy changes reflect a broader U.S. initiative to tighten control over semiconductor equipment and technology exports to China, thereby strengthening U.S. influence over chip production in the region [5]. - South Korean memory chipmakers SK Hynix and Samsung also had their VEU privileges revoked, indicating a wider impact on foreign semiconductor manufacturers operating in China [3].