US Revokes TSMC’s Waiver for Chip Supplies to China, Stirring Uncertainty

The U.S. government has revoked TSMC's Validated End-User (VEU) authorization for its Nanjing plant, effective December 31, 2025. The Taiwanese semiconductor giant confirmed the notification, stating it is evaluating the situation while engaging with U.S. authorities to ensure uninterrupted operations. Without VEU privileges, TSMC's vendors must now seek individual licenses for each shipment of U.S.-controlled semiconductor tools to Nanjing—a process that could delay supply chains.

Taiwan’s Ministry of Economic Affairs warns of potential production uncertainty at the Nanjing facility, though it downplays broader risks, noting the plant accounts for just 3% of TSMC’s total capacity. Market reaction was immediate: TSMC’s U.S.-listed ADRs dropped 2.3% following the announcement. U.S. regulators have pledged to expedite approvals, but backlogged license requests and bureaucratic hurdles loom.

The MOVE underscores escalating tech trade tensions between Washington and Beijing, with semiconductor supply chains caught in the crossfire. Applied Materials, ASML, Tokyo Electron, and KLA—key suppliers to TSMC—now face heightened compliance burdens as the industry scrambles to adapt.