US revokes TSMC’s authorisation on China-bound tech

Washington has pulled Taiwan Semiconductor Manufacturing Company’s (TSMC) authorisation to freely ship advanced technology from the US to China, the company said.

The block potentially disrupts the chip giant’s manufacturing capabilities in China, which produces older-generation devices.

Washington made a similar move with South Korea’s Samsung and SK Hynix last week, making it harder for the companies to ship American products for their Chinese factories.

TSMC told the BBC it was assessing the situation and would be in talks with the US government, adding it remains “fully committed to ensuring the uninterrupted operation” of its facility in China.

The chipmaker was notified by the US government that its authorisation to export advanced technology to China would be revoked by the end of the year.

The BBC has contacted the US Commerce Department for comment.

TSMC is the world’s largest semiconductor manufacturer, making chips for all sorts of tech devices and for clients such as Nvidia.

The US issued sweeping restrictions on the export of advanced technology to China as part of efforts to safeguard its economy, though it initially granted waivers to some global tech firms.

It is unclear how quickly licenses may be approved, potentially slowing shipments.

The Trump administration’s move on the chipmakers could make shipments more expensive and complicated as suppliers from the US will need to apply for individual approvals, according to investment specialist Raymond Woo.

Chinese customers could also be forced to turn to domestic alternatives that may be several generations behind. But this could increase innovation as Chinese companies make the most of existing equipment where raw performance isn’t critical, he added.

The overall impact on TSMC was likely to be “limited” as its sole Chinese facility in Nanjing produces older chips that make up a small portion of its total revenue, said Mr Woo from Kyoto University Innovation Capital, the school’s investment arm.