The U.S. government has issued an annual export license to Taiwan Semiconductor Manufacturing Co. (TSMC), permitting the firm to import American chipmaking equipment into its Nanjing, China, facility. This authorization, announced by TSMC on Thursday, replaces previous exemptions known as “validated end-user status” that expired on December 31, 2025.
The license enables the continuous supply of U.S. export-controlled items to the Nanjing site without requiring individual vendor permits, thereby ensuring “uninterrupted fab operations and product deliveries”. Similar licenses were also granted to South Korean semiconductor giants Samsung Electronics and SK Hynix.
While Washington continues to implement sweeping restrictions on chip-related exports to maintain a technological lead over China, these licenses provide a degree of operational stability for established facilities. The Nanjing plant focuses on mature 16-nanometer node technology rather than TSMC’s most advanced semiconductors. According to TSMC’s 2024 annual report, the Nanjing site accounts for approximately 2.4% of the company’s total revenue.
Analysis: Navigating the Silicon Curtain
The transition from broad exemptions to specific annual licenses marks a critical evolution in the “Silicon Curtain” being drawn between U.S. technology and Chinese manufacturing. Historically, companies like TSMC, Samsung, and SK Hynix operated under “validated end-user” status, a blanket privilege that streamlined the movement of tools and components. By shifting to annual licenses for 2026, the U.S. Department of Commerce maintains a tighter leash, allowing for a yearly review of how American technology is utilized within Chinese borders.
This regulatory shift highlights the delicate balancing act required in the global semiconductor trade. On one hand, the U.S. aims to stifle China’s progress in high-end computing and military applications. On the other, a total decoupling would jeopardize the global supply chain for “mature nodes”—the 16-nanometer chips produced in Nanjing that power everything from automotive systems to consumer electronics. For instance, a sudden halt in operations at the Nanjing facility could trigger shortages in the global auto industry, similar to the disruptions seen in 2021.
Furthermore, the economic stakes for these “Big Tech” firms remain significant. Although the Nanjing site represents a modest 2.4% of TSMC’s revenue, the capital invested in these fabrication plants (fabs) is immense. For South Korean firms like SK Hynix, which has even larger manufacturing footprints in China, these licenses are not just administrative hurdles; they are existential safeguards for billions of dollars in hardware assets. As we move further into 2026, the industry will likely see these annual renewals become a standard barometer for the temperature of U.S.-China relations.
