The U.S. Department of Commerce has granted a one-year export license to Taiwan Semiconductor Manufacturing Company Limited (TSMC) to import U.S. chip manufacturing equipment to its facilities in Nanjing, China.
This approval allows the world’s largest dedicated independent semiconductor foundry to continue receiving chipmaking gear from the U.S. without any vendor-level delays.
TSMC Wins One-Year License to Import U.S. Chipmaking Tools for China Plant
Previously, TSMC and other Asian companies had benefited from exemptions from Washington’s sweeping restrictions on chip-related exports to China, which were part of the White House’s efforts to try to stay ahead of China in technological research and development.
However, those exemptions, known as validated end-user status, expired on December 31, forcing companies to seek U.S. export licenses for 2026. The new authorization covers all U.S.-controlled tools heading into the Nanjing site, skipping the need for separate vendor applications.
According to a statement released by TSMC, the license ensures uninterrupted fab operations and product deliveries. The Nanjing plant, which runs production lines for 16-nanometer (nm) and other mature nodes, is not used for the company’s most advanced semiconductors. Still, according to TSMC’s 2024 annual report, that site contributed to about 2.4% of its full-year revenue. The firm also operates another plant in Shanghai.
Meanwhile, the U.S. Department of Commerce also granted similar import licenses to South Korea’s Samsung Electronics and SK Hynix. All three companies had to apply for new licenses after their previous privileges expired, which had offered them a smoother path to operate in Mainland China despite Washington’s export controls aimed at limiting Beijing’s tech development.
TSMC Begins Mass Production of Next-Gen 2nm Chips
Earlier this week, TSMC officially began the volume production of 2nm chips. The next-generation semiconductors are being manufactured in the company’s facility in Kaohsiung, Taiwan, utilizing the first-generation nanosheet transistor technology.
TSMC described the 2nm process as the most advanced in the industry in terms of transistor density and energy efficiency. The chipmaker added that the technology is designed to address the increasing need for energy-efficient computing, particularly for AI and mobile applications. They did not specify the exact start date for mass production of the chips during their most recent investor conference in mid-October.
The 2nm chip offers between 10% and 15% increase in speed and performance at the same level of power consumption as the N3E process used for the company’s 3nm chips. Its transistor density has also been increased by more than 15%.
TMSC is already in the process of developing the N2P manufacturing method, which is an enhanced version of the 2nm node – slated for mass production in the second half of 2026.
Just as the company secured its export license from the U.S. government, it had to deal with a disruption caused by an earthquake. On Saturday, TSMC said that a small number of buildings inside the Hsinchu Science Park campus had to be evacuated.
In a public announcement, the company said it conducted outdoor evacuations and headcounts in accordance with emergency response procedures, while assuring that work safety systems at all facilities within the campus were operating normally. Operations elsewhere, including the main fabs, remained unaffected by the earthquake warning.
Nvidia Lags on 2M H200 China Order, Presses TSMC to Boost Output
Meanwhile, Nvidia is behind on the order for 2 million H200 chips from Chinese tech firms, with Jensen Huang’s company only having 700,000 units ready to be shipped. The U.S. tech behemoth has asked TSMC to ramp up production of H200s, with people familiar with the matter stating that mass production will likely begin by Q2 2026.
However, another major hurdle is that the chips haven’t been cleared by Beijing for import. Though Washington lifted the export bans to China in November, U.S. shipments to the country are now charged with a 25% tariff. This production bottleneck, added with a surge in demand, could impact Nvidia’s global customers.
BofA, Bernstein Set $330–$360 Price Target for TSMC by 2026
Wall Street analysts are bullish on TSMC’s stock, TSM, as Bernstein bumped their price target for the company to $330, up from its previous valuation of $290. The key driver behind the change was the company’s plan to boost Chip-on-Wafer-on-Substrate (CoWoS) output to 125,000 wafers per month by the end of the year. However, Bernstein warned that this output won’t be enough to handle Nvidia’s Blackwell (2025) and Rubin, an upcoming chip design for 2026.
Bank of America (BoA) has set a price target of $360 for TSMC, arguing that the company is dominating production for both next-generation AI chips and mobile processors, which are central to high-performance computing (HPC).
TSMC (NYSE: TSM) closed Thursday’s session at $303.89 – down 0.18% on the day.
