Minimum Impact of Trump Administration’s Restrictions on TSMC’s China Equipment Imports, according to Taiwanese Ministry

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Recently, the Taiwanese Ministry of Economic Affairs has described the new US requirements for licensing chip manufacturing equipment shipments to China as having a minimal impact on TSMC’s operations. This assertion follows a Bloomberg report, which TSMC also confirmed, indicating that the US government has discontinued a license waiver program that previously applied to machinery imported for TSMC’s semiconductor facility in Nanjing, China. TSMC has expressed its commitment to ensuring the “uninterrupted operation of TSMC Nanjing”while engaging in discussions with US authorities.

Strengthening Compliance: Taiwan’s Economic Ministry on Export Controls

As the leading contract chip manufacturer globally, TSMC has established its significance through advanced chip production techniques. In its most recent earnings report, TSMC revealed that approximately 75% of its sales originate from North America, while both China and the Asia-Pacific region account for 9% of total sales each. Notably, TSMC’s revenue share from China experienced a decline, falling seven percentage points from Q2 2024 to Q2 2025, whereas revenue from North America surged by ten percentage points during the same period.

In response to the US’s revised regulations governing chip manufacturing imports in China, Taiwan’s Economic Ministry underscored TSMC’s limited dependency on revenue from Chinese markets. The new US regulations have revoked the Validated End User (VEU) status for TSMC’s Nanjing manufacturing facility, established during the Biden administration.

TSMC’s Nanjing plant primarily focuses on producing chips that utilize older technology, with 16-nanometer chips being the most advanced offering available from this site. Previously issued waivers allowed American and Japanese companies, including Applied Materials, KLA Corporation, and Tokyo Electron, to efficiently transfer equipment to this location.

The Taiwanese Ministry’s statement emphasizes the necessity for domestic companies to strictly adhere to all export controls, ensuring that their international operations remain unimpeded. With the Nanjing facility contributing around 3% to TSMC’s overall revenue, the ministry indicated that the new US policies are unlikely to exert significant pressure on TSMC or affect Taiwan’s competitive stance in the global market.

Furthermore, the Ministry clarified that under the new regulations, both TSMC and its suppliers will need to pursue case-by-case approval for chip import licenses. It is important to note that, apart from the Nanjing facility, no other TSMC operations in China will be impacted by these new rules.

TSMC’s robust profitability is largely attributed to its ability to command high prices for its leading-edge technologies. In the second fiscal quarter, the company reported that 60% of its $30 billion revenue was derived from its advanced 3-nanometer and 5-nanometer technologies, while older 16-nanometer and 20-nanometer products constituted just 7% of its sales.

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