Taiwanese semiconductor giant TSMC has applied for permanent authorization from Washington to allow the export of US chip-making equipment to its China-based factory. The US imposed export restrictions last year to prevent China from acquiring advanced semiconductor technology.
The restrictions are viewed as a national security threat, but they have raised concerns among the world’s largest chipmakers about the future of their operations in China. TSMC has been authorized to continue operating in Nanjing and is currently in the process of applying for permanent authorization for its operations in China. The firm was advised by the Bureau of Industry and Security to apply for a “Validated End-User (VEU)” authorization, which would serve as a permanent authorization. TSMC anticipates obtaining permanent authorization through the VEU process.
Taiwan Semiconductor Manufacturing Corporation (TSMC) has received a waiver extension from the US, allowing it to designate its factory in Nanjing as a “verified end user”. This move would eliminate the need for a separate export approval process. South Korea, home to tech giant Samsung and rival SK Hynix, has also been granted waivers. The decision has resolved the most significant trade issue for semiconductor companies, alleviating uncertainties over their assembly lines in China.
Semiconductors have become a flashpoint issue between the US and China, who are locked in a fierce battle over access to chip-making technology and supplies. Taiwan, home to some of the world’s most advanced companies, is home to TSMC, a key leader in the industry. China claims Taiwan as its territory, and its military pressures and ongoing Beijing-Washington tech tussle have left chipmaking firms on the island navigating between business and geopolitical issues.