TSMC is the top foundry of choice for companies that design chips but don’t have the facilities to build them. Companies like Apple, Nvidia, Qualcomm, MediaTek, Broadcom, AMD, and others rely on the Taiwan-based firm to build the chips they design. TSMC says that it is taking a look at the situation and continues to communicate with the U.S. government. It did add that the company remains “committed to ensuring the uninterrupted operations of TSMC Nanjing.” This Chinese fab produces 28nm, 16nm, and 12nm chips. While not cutting-edge components, they are still in demand.
In 2022, the U.S. issued restrictions on the shipment of chipmaking equipment to China. The goal was to prevent the Chinese military from accessing powerful, cutting-edge semiconductors. The United States waived these restrictions for TSMC and other companies such as Samsung Foundry and SK Hynix. The two South Korean firms also had authorizations for their Chinese plants pulled last Friday, and this action will take place in 120 days.
In some ways, it is a surprising decision on the part of the Trump administration, which has been looking to reduce the restrictions placed on AI-chip exports during the Biden era. Just last month, the current administration approved licenses allowing Nvidia to sell its H20 GPU/AI Accelerator chip in China. This move will allow Nvidia to compete with Chinese manufacturer Huawei inside the country.
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On Friday, the Commerce Department said that it will issue licenses allowing the foreign companies to continue operating their facilities in China. The operators will not be allowed to expand the factories or update the technology.
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