The US has revoked TSMC Nanjing's Verified End-User status, effective as of the end of 2024, requiring case-by-case approval for US equipment imports. Taiwan's Economic Minister Kung Ming-hsin emphasized the importance of cooperation and ongoing dialogue with Washington, while evaluating that the move will have minimal impact, given TSMC's relatively small production share in China.
Limited industry impact expected
Taiwan's Ministry of Economic Affairs (MOEA) evaluated that the US decision will not affect the overall competitiveness of Taiwan's semiconductor industry. The newly appointed Minister Kung noted that TSMC will maintain ongoing communication with the US government, and the ministry will provide assistance as needed.
Kung emphasized that TSMC's production capacity in China remains relatively small, accounting for only 3% compared to Samsung's 20% and SK Hynix's 40%, and is expected to decline further. Furthermore, TSMC's share of Taiwan's total semiconductor output is even smaller, leading the MOEA to conclude that the new US measures will not significantly impact Taiwan's industrial competitiveness.
New licensing requirements take effect
The Industrial Development Administration under MOEA explained that the US government's cancellation of the VEU status means that TSMC Nanjing must now seek individual license approvals for each shipment of controlled US technology. This effectively replaces the previous system that allowed certain imports under general authorization without case-by-case applications. The new process introduces greater regulatory scrutiny and may affect the predictability of the plant's operations.
The MOEA stated that the revocation of VEU status appears not to target any single firm but reflects the broader tightening of US semiconductor export controls. Given the close connections between Taiwan's semiconductor supply chains and the US, Taiwanese companies are encouraged to enhance compliance with export regulations to protect their business interests. Since taking office in September 2024, Kung has been engaging with industries affected by US tariffs to better understand and respond to such external pressures.
Article edited by Jerry Chen
