US Grants TSMC Annual Licence to Import Chipmaking Tools Into China
A targeted approval amid ongoing tech controls
The United States has granted an annual licence allowing Taiwan Semiconductor Manufacturing Co to import American chipmaking equipment into its fabrication plant in Nanjing, eastern China. The approval applies specifically to tools used at TSMC’s facility in Jiangsu province and is intended to ensure continuity of operations under a tightly controlled regulatory framework.
The decision highlights the increasingly nuanced nature of US export controls on advanced technology. While Washington continues to restrict China’s access to cutting edge semiconductor capabilities, it is also allowing limited, conditional access to equipment deemed necessary for maintaining existing production lines.
Ensuring uninterrupted production and deliveries
In a statement to Reuters, TSMC said the licence would ensure uninterrupted fab operations and product deliveries. This is a critical point for the world’s largest contract chipmaker, whose customers rely on predictable output and stable supply chains.
The Nanjing facility primarily produces mature node chips rather than the most advanced semiconductors. These chips are widely used in automobiles, consumer electronics, and industrial applications, making them essential to global manufacturing ecosystems. Disruption at this level could have knock on effects across multiple industries.
By granting a time limited licence, US authorities appear to be balancing strategic concerns with practical supply chain realities.
A broader pattern of conditional access
TSMC is not alone in receiving such approval. South Korean firms Samsung Electronics and SK Hynix have also been granted similar licences to import American semiconductor equipment into their Chinese operations.
This suggests a coordinated approach by the US government toward non Chinese companies operating fabs in China. Rather than enforcing blanket bans, regulators are issuing annual licences that can be reviewed, adjusted, or revoked depending on geopolitical conditions and compliance requirements.
The approach provides leverage while avoiding sudden shocks to global chip supply.
Why Nanjing matters in the semiconductor landscape
TSMC’s Nanjing plant plays a strategic role in serving regional demand, particularly within China. While it does not manufacture the most advanced chips, its output supports sectors that are critical to both Chinese and global economies.
Automotive manufacturers, industrial automation firms, and appliance makers all depend on mature node semiconductors. Limiting production at this level could exacerbate supply shortages and inflate costs, a scenario policymakers are keen to avoid after recent global chip disruptions.
Maintaining stable output from such facilities therefore aligns with broader economic stability goals.
US China tech rivalry and managed friction
The licence decision takes place against the backdrop of sustained US China technology rivalry. Export controls on advanced chips and manufacturing tools remain a central element of US strategy aimed at slowing China’s progress in high end semiconductors and artificial intelligence.
At the same time, the approval signals recognition that complete decoupling is neither immediate nor cost free. Allowing allied firms to maintain existing operations in China helps manage friction while preserving long term strategic options.
Annual renewal also gives Washington flexibility, enabling it to respond quickly to changes in geopolitical or security assessments.
Implications for global chipmakers
For companies like TSMC, Samsung, and SK Hynix, the licence system introduces both certainty and uncertainty. On one hand, it allows continued operation and planning over a defined period. On the other, annual renewal means long term investments in China remain subject to political risk.
As a result, many chipmakers are diversifying manufacturing footprints, expanding capacity in regions such as Taiwan, South Korea, the United States, and parts of Southeast Asia. China remains important, but no longer singular.
What this means for China’s chip ambitions
From China’s perspective, the licence underscores continued dependence on foreign equipment for semiconductor manufacturing. While domestic alternatives are improving, American tools remain essential for maintaining efficiency and yield, even at mature nodes.
This reality reinforces Beijing’s push for self sufficiency in semiconductor equipment and materials. However, such efforts take time, meaning foreign suppliers and regulatory approvals will remain influential in the near term.
A controlled compromise rather than a reversal
The US decision to grant annual import licences to TSMC and other firms does not signal a rollback of export controls. Instead, it reflects a controlled compromise that seeks to protect strategic interests while maintaining stability in global supply chains.
As geopolitical tensions persist, similar case by case approvals are likely to remain a feature of the semiconductor landscape. For now, the licence provides reassurance to markets that critical chip production in China will continue, albeit under close scrutiny.
