TAIPEI (Taiwan News) — TSMC said on Tuesday the US has withdrawn its approval to send chipmaking equipment to its facility in China, but the Ministry of Economic Affairs stressed the move will not affect Taiwan's overall industrial competitiveness.

The change, effective Dec. 31, revokes the export privilege known as Validated End User status from its Nanjing facilities, per Reuters. However, the MOEA said only the Nanjing fab’s 16nm production falls under these controls, representing a small fraction of TSMC’s total capacity, per Newtalk. 

The ministry explained that the US government's cancellation of VEU status means future imports of US-made tools will require individual license applications. This shifts the process from a fast-track system, under which the plant was pre-authorized to obtain controlled US goods without case-by-case approval, back to a model requiring licenses for each shipment.

The MOEA pointed out that the US last week also canceled VEU status for Samsung Electronics and SK Hynix, indicating the measure is not targeted solely at TSMC. With US-Taiwan semiconductor supply chains closely linked, the ministry urged local firms to reinforce compliance to protect their interests.

It said Samsung has about 20% of its DRAM output in China and SK Hynix roughly 40%, while TSMC’s China operations, affected by these controls, account for only around 3% of its capacity. The ministry stressed the impact on Taiwan’s overall semiconductor industry will be minimal and pledged to stay in close contact with US authorities and domestic companies.