Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday said it expects to receive permanent authorization to continue operating a chip manufacturing factory in Nanjing after being granted an extension to a waiver to supply US chip equipment to its factories in China.
The world’s biggest contract chipmaker said it has been authorized to continue operating in Nanjing, where TSMC is expanding its 28-nanometer chip capacity to satisfy demand.
Last year, the chipmaker received a one-year authorization to operate the Nanjing fab deploying 28-nanometer and 16-nanometer technologies.
Photo: I-Hwa Cheng, Bloomberg
The Chinese market contributed about 12 percent to the company’s total revenue in the second quarter.
“We are in the process of applying for a permanent authorization for our operations in China,” TSMC said in a statement. “We have been advised by the [US] Department of Commerce’s Bureau of Industry and Security to apply for Validated End-User [VEU] authorization, which would serve as a permanent authorization.”
The authorization has existed since 2007, but TSMC has not needed it previously, the chipmaker said.
“We expect to receive a permanent authorization through the VEU process,” TSMC said.
It has a modest campus in a Shanghai suburb and operates a site in Nanjing that makes 16-nanometer chips, four generations behind leading-edge technology.
Samsung Electronics Co and SK Hynix Inc have been effectively granted an indefinite waiver on broader restrictions banning the shipment of advanced US chipmaking gear to China, South Korea’s presidential office said earlier this week.
Sweeping US regulations announced in October last year struck at the heart of Beijing’s tech ambitions, but also cast uncertainty over foreign chipmakers in China, including TSMC and its South Korean peers.
All three firms secured one-year waivers at the time, which allowed them to import vital equipment, but have since grappled with uncertainty over whether the exemptions would be extended.
US President Joe Biden’s administration late last month also removed a stringent curb on expansion in China by semiconductor companies that receive federal funds to build plants in the US.
TSMC and Samsung are expected to secure US subsidies for new facilities in the country.
Separately, TSMC is planning to produce 6-nanometer chips at its second plant in Japan, which is under construction, the Nikkei reported yesterday.
The chips would be manufactured in a new facility that TSMC is planning at its Kumamoto site in southwestern Japan, it said.
Total investment is estimated at ￥2 trillion (US$13.4 billion), with the Japanese Ministry of Economy, Trade and Industry considering providing up to ￥900 billion, the report said.
They would be the most advanced semiconductor products to be made in the country.
The Japanese government is putting together aid for the semiconductor sector as part of an economic stimulus package that would be finalized as soon as the end of this month.
The support would include subsidies for the second TSMC plant.
The ministry has asked for ￥3.35 trillion for this fiscal year’s supplementary budget.
Additional reporting by Bloomberg
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