TSMC Faces Imminent Operational Challenges Following U.S. Withdrawal of China Chip Equipment Exemption
The United States has taken a significant step in the global semiconductor industry by revoking Taiwan Semiconductor Manufacturing Co's (TSMC) Validated End User (VEU) status. This action, according to a Macquarie Group research note on Tuesday, will affect TSMC's Nanjing fabrication plant and could potentially disrupt operations within the industry.
The U.S. Department of Commerce's decision also impacts other companies such as United Microelectronics Corporation (UMC) and Semiconductor Manufacturing International Corporation (SMIC). However, the specifics of the actions against Samsung Electronics and SK Hynix are not yet clear.
The revocation of TSMC's VEU status means that future shipments of US-origin semiconductor equipment to TSMC's Nanjing fabrication plant will require individual licenses. This could make sourcing chipmaking gear more difficult for TSMC, potentially leading to fabrication plant (fab) shortages.
The reason behind the US action is not provided, but delayed license approvals could exacerbate the situation. This development, set to take effect from December 31, could potentially cause shortages that could disrupt operations within the industry months down the line.
The Macquarie Group research note also mentions potential issues for TSMC's operations, but the impact on TSMC's operations and production schedules, as well as the effect on Samsung Electronics and SK Hynix's operations, is not detailed.
The location of these potential actions is not specified, but the mention of Samsung Electronics and SK Hynix suggests that they may be taking place in Japan. The nature of these actions is not detailed, and it is not clear whether the revocation is temporary or permanent.
This move by the US government is a significant development in the global semiconductor industry, and its implications will be closely watched in the coming months. As the industry grapples with supply chain disruptions and increased demand, this revocation could further complicate matters.
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