The Biden administration's plans to introduce new regulations aimed at restricting the sale of advanced chips to China have put pressure on Taiwan Semiconductor Manufacturing Company (TSMC) and other major chip producers. The proposed measures are part of a broader strategy to prevent advanced semiconductors from reaching the Chinese mainland, particularly targeting companies like Huawei Technologies, which have been accused of circumventing existing restrictions. The regulations would require chipmakers to increase due diligence and scrutinize their customers more carefully, potentially impacting TSMC's business with Chinese clients.
The new rules, expected to be announced soon, would build on existing global semiconductor restrictions and could significantly affect the flow of chips at a threshold of 14 or 16 nanometers and below. These chips would be presumed restricted and would require a government license for sale in China. The move is seen as an effort to close loopholes that allow Chinese firms to acquire advanced chips despite previous curbs. The Chinese government has expressed strong opposition to these measures, arguing that they politicize and weaponize economic and technological issues, which could ultimately harm the global semiconductor industry.
TSMC's stock is trading at $200.43, down 0.51% from its previous close of $201.45 on January 14th.