The U.S. government has informed Taiwan Semiconductor Manufacturing Company (NYSE:TSM) it intends to take away the company’s authorization to freely ship chipmaking components to its Nanjing facility in China.
“TSMC has received notification from the U.S. Government that our VEU authorization for TSMC Nanjing will be revoked effective December 31, 2025,” TSMC said in a statement to Seeking Alpha. “While we are evaluating the situation and taking appropriate measures, including communicating with the US government, we remain fully committed to ensuring the uninterrupted operation of TSMC Nanjing.”
TSMC’s shares had inched down 1.4% by late morning trading on Tuesday.
VEU, or validated end users, “are designated entities located in eligible destinations to which eligible items subject to the Export Administration Regulations, or EAR, may be exported, reexported, or transferred under a general EAR authorization instead of a license,” according to the U.S. Department of Commerce.
Similarly, the Department of Commerce’s Bureau of Industry and Security is also removing Samsung (OTCPK:SSNLF) and SK Hynix’s VEU status for China-based facilities at the end of the year, according to a rule published today in the Federal Register. It will also rescind Intel’s (NASDAQ:INTC) VEU for its facility in Dalian, China.
Starting in 2026, these companies must apply for U.S. licenses to ship components covered by export controls to their Chinese manufacturing facilities.
“BIS estimates that the new removal of these entities from the VEU program under the EAR will result in the submission of an additional 1,000 license applications annually, which would be an increase of 495 burden hours,” reads the Federal Register.
These three companies had secured the VEU waiver to ship to Chinese facilities under former U.S. President Joe Biden’s administration, according to Bloomberg.