TSMC's Nanjing factory receives an unlimited exemption permit from the United St

This move heralds that TSMC will continue to play a significant role in the global chip market competition in the future.

TSMC (Nanjing) Co., Ltd. has recently been granted the "Validated End-User" (VEU) authorization by the U.S. Department of Commerce, which is an indefinite exemption from authorization. This news has sparked widespread attention and discussion in the global chip industry.

This formal VEU authorization replaces the temporary written authorization issued by the Department of Commerce since October 2022. TSMC assessed that this VEU authorization maintains the current status of TSMC (Nanjing) Co., Ltd. in producing semiconductors.

Adjustment of U.S. export control policy and indefinite exemption

In October 2022, the U.S. Department of Commerce introduced new export control policies for semiconductors to China, strengthening restrictions on the acquisition of advanced semiconductor manufacturing equipment by Chinese mainland wafer fabs, which must be imported with special permission from the U.S. Department of Commerce.

However, in order to support the stability of the global supply chain and promote international technological cooperation, the U.S. Department of Commerce has recently begun to grant "Validated End-User" (VEU) authorizations. These authorizations exempt certain companies (such as TSMC's Nanjing factory) from import license requirements, ensuring their stable access to U.S. technology and equipment, thereby ensuring the continuity of their production.This time, TSMC's Nanjing factory has obtained an indefinite exemption authorization, replacing the previous temporary written authorization, confirming its ability to continuously receive items and services under the U.S. export control regulations for a long period without additional individual licenses.

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Background and Impact of TSMC's Nanjing Factory

Since deciding to invest in the construction of an advanced process wafer foundry in Nanjing in 2015, TSMC officially named it TSMC (Nanjing) Co., Ltd., becoming one of the company's important manufacturing bases in mainland China. The factory is located in the Jiangbei New District of Nanjing City, covering an area of about 30 hectares, and is TSMC's first 12-inch wafer foundry in mainland China.

In October 2018, TSMC's Nanjing factory was put into operation six months ahead of schedule, quickly demonstrating its advantages in technology and production efficiency. The factory adopts advanced process technology and automated equipment, with an annual production capacity of 100,000 12-inch wafers, including physical, chemical, and optical technology production lines, making its product quality and performance reach a world-leading level.

Global Chip Market Response and Impact Analysis

According to the indefinite exemption, the U.S. Department of Commerce's Bureau of Industry and Security will add chip manufacturers to its "Validated End-User" (VEU) list, which indicates which entities can receive various U.S. technology exports. Once included in the list, chip manufacturers will no longer need new licenses for individual export cases.

In October last year, the South Korean presidential office reported that the U.S. Department of Commerce had agreed to provide Samsung Electronics and SK Hynix's wafer factories in China with an indefinite exemption, meaning that U.S. suppliers can supply semiconductor equipment to Samsung and SK Hynix's wafer factories in China without any licenses.

This news has triggered a positive response in the chip market. It is reported that on June 18, related chip stocks such as SMIC and Huahong Semiconductor H-shares in the Hong Kong stock market rose by more than 3% against the market, reflecting the market's optimistic attitude towards the stable production of TSMC's Nanjing factory.The price surge in the chip industry is also spreading throughout the entire industrial chain. In May and June of this year, major power chip manufacturers such as CR Micro and Yangtze Memory have successively announced price increases and negotiations. According to reports, TSMC may also initiate a new round of price adjustment negotiations, especially for advanced processes such as 5/3/2nm, and it is expected that these adjustments will officially take effect as early as 2025.

Analysts believe that the issuance of the U.S. indefinite exemption authorization will not only have a significant impact on the operational stability and development prospects of TSMC's Nanjing factory but also help stabilize the overall chip supply chain. With the continuous growth of global chip demand and technological progress, the position of TSMC's Nanjing factory in global chip production will become more prominent, providing important support for the industry's sustained development.

Looking ahead, as the global chip market competition intensifies and technological innovation continues to drive, TSMC's Nanjing factory will continue to leverage its advantages in advanced process production and technology research and development. It is expected that, driven by the upcycle of the chip industry, the factory will further expand its production capacity and market share, providing global customers with higher quality and high-performance chip products.

In summary, the U.S. indefinite exemption authorization for TSMC's Nanjing factory is not only an important milestone in the company's strategy but also marks a positive adjustment of the global chip industry in terms of technological cooperation and market openness. This move indicates that TSMC will continue to play an important role in the future global chip market competition and promote the industry's development forward.