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In response, TSMC stated its aim to ensure “uninterrupted operation of TSMC Nanjing” while working with the US government. According to TSMC’s latest earnings release, 75% of its sales come from North America, with China and Asia Pacific each contributing 9%.
Taiwan’s economic affairs ministry noted that TSMC relies minimally on Chinese revenue. The new rules revoke TSMC’s Validated End User (VEU) status for the Nanjing facility, which previously waived import equipment license requirements. This brings TSMC in line with Samsung and SK hynix, whose waivers were also revoked.
TSMC’s Nanjing facility produces chips using older technologies, with its most advanced technology being 16-nanometers. The earlier waivers allowed American and Japanese firms like Applied Materials, KLA Corporation, and Tokyo Electron to quickly ship equipment to China.
The economic ministry’s statement urged domestic firms to comply with all export control rules to ensure smooth global operations. Given that the Nanjing plant accounts for about 3% of TSMC’s revenue, these new rules are unlikely to significantly impact either TSMC or Taiwan’s global competitiveness.
Under the new rules, TSMC and its suppliers will need case-by-case approval for chip import licenses. No other TSMC facilities in China are affected by these changes.
Despite the restrictions, TSMC generates most of its revenue from leading-edge chip manufacturing technologies. During its second fiscal quarter, 60% of its $30 billion in revenue came from 3-nanometer and 5-nanometer technologies, while 16-nanometer and 20-nanometer products accounted for only 7%.
