Taiwan Semiconductor Manufacturing Co. (TSM) just got the paperwork it needs to keep its China operations humming along. The US Department of Commerce approved a one-year export license that allows TSMC to bring American chipmaking equipment into its Chinese facilities without jumping through hoops for every individual shipment.
Washington Changes the Rules of the Game
According to Reuters, TSMC announced Thursday that the license covers its Nanjing fabrication plant and streamlines the approval process considerably. Instead of requiring separate sign-offs from individual equipment vendors, the license creates a unified pathway for US-controlled tools to flow into the facility. TSMC says this arrangement helps maintain smooth manufacturing operations and keeps product deliveries on schedule.
The timing matters here. This approval lands after Washington let certain special exemptions expire at the end of December. Those exemptions, called validated end-user status, had given select foreign chipmakers operating in China fairly open-ended access to US technology. Under the new framework, companies need to apply for export licenses on a regular basis rather than coasting on broad waivers.
TSMC isn't alone in this boat. South Korean semiconductor giants Samsung Electronics Co. Ltd. (SSNLF) and SK Hynix have received similar licenses to keep their China operations supplied with American equipment.
The Focus Stays on Mature Technology
It's worth noting what TSMC is actually making in China. The Nanjing facility produces 16-nanometer and other mature-node chips, not the company's most advanced semiconductors. TSMC also operates a separate chip plant in Shanghai. This distinction is central to how US export controls are designed: curb China's access to cutting-edge semiconductor technology while avoiding massive disruptions to global supply chains and allied companies.
For TSMC's bottom line, the China operations aren't exactly massive. In its 2024 annual report, the company disclosed that Nanjing accounted for roughly 2.4% of total revenue.
Recent Turbulence and Strong Performance
Meanwhile, TSMC has recently drawn investor attention for different reasons. A magnitude 7.0 earthquake off northeastern Taiwan triggered precautionary measures at several of its facilities, sparking concerns about potential production disruptions.
Despite these worries, the $1.28 trillion chip giant has posted impressive gains over the past year, climbing more than 46%. The rally reflects strong demand driven by TSMC's position as a major supplier to Nvidia Corp. (NVDA) and Apple Inc. (AAPL), two companies with seemingly insatiable appetites for advanced semiconductors.
The company continues showing solid price momentum across short, medium, and long-term timeframes, indicating that investors remain confident in its ability to navigate both geopolitical complexity and natural disasters while maintaining its role as the world's premier contract chipmaker.