TSMC Expects to Get Permanent Approval to Equip Chinese Fab (Updated)

(Image credit: TSMC)

TSMC expects to receive a one-year permission to equip its Chinese fabs with wafer fab tools produced in the U.S. from the U.S. government, a Taiwan minister announced on Friday and reported by Reuters. Meanwhile, TSMC has applied to the U.S. government for the verified end-user status in order to obtain indefinite permission to import necessary equipment to China for its fab in Nanjing, the report claims.

Taiwan Economy Minister Wang Mei-hua said on Friday that TSMC had received a waiver from the United States to supply U.S. equipment to the company's factory in China for a year. As a result, the world's No. 1 contract chipmaker can ship American wafer fab equipment to China without individual export licenses for every tool it needs, albeit for 12 months only.

The U.S. Department of Commerce's Bureau of Industry and Security (BIS) has recommended TSMC to enroll in the 'validated end-user' (VEU) program. Participation in this initiative would free TSMC from obtaining separate clearances for each equipment export, simplifying the procurement process and ensuring smoother operational workflows for the company in China.

”TSMC has been authorized to continue operate in Nanjing and we are currently in the process of applying for a permanent authorization for our operations in China,” a TSMC spokesperson told Tom’s Hardware. “We have been advised by the Bureau of Industry and Security (BIS) to apply for a Validated End-User (VEU) authorization, which would serve as a permanent authorization. The VEU authorization has existed since 2007 which TSMC did not need to apply for it in the past. We expect to receive a permanent authorization through the VEU process.“

 The latest export rules imposed by the U.S. government in October 2022 prohibit sales of tools and technologies needed to produce non-planar transistor logic chips below 14nm/16nm, 3D NAND chips with more than 127 active layers, and DRAM ICs with a half-pitch less than 18nm to Chinese entities without an export license.  

Meanwhile, Samsung, SK Hynix, and TSMC got a one-year permission to equip their Chinese fabs with necessary tools without obtaining a license. Furthermore, Samsung and SK Hynix recently obtained permanent permission to import required tools for their fabs to China. As it turns out, TSMC has not yet enrolled in the VEU program, but it still got permission to equip its fab in China with the machinery it needs for one year. As soon as it gets its VEU status, it will no longer require temporary waivers.

Update (October 13th, 11:10 EST): Added official quote from TSMC representative.

Anton Shilov
Freelance News Writer

Anton Shilov is a Freelance News Writer at Tom’s Hardware US. Over the past couple of decades, he has covered everything from CPUs and GPUs to supercomputers and from modern process technologies and latest fab tools to high-tech industry trends.