Apple partner, TSMC granted one year exemption from the new US tech export laws

At its latest earnings call, Taiwanese Semiconductor Manufacturing Company (TSMC) announced that it had been granted a one-year exemption from the new US tech export laws. This makes TSMC the third East Asian company to get relaxation, Samsung and SK Hynix.

As part of its plan to increase the production of semiconductors in the United States, President Biden’s administration recently passed a strict U.S law that prohibits exports of “advanced technology” to companies based in China.

TSMC- Apple

According to Reuters, the U.S. government aims to “hobble” China’s chip industry by cutting it off “from certain semiconductor chips made anywhere in the world with U.S. equipment.” and has sent letters to top toolmakers to stop shipments of equipment to “wholly” Chinese-owned sites manufacturing advanced logic chips.

The raft of measures could amount to the biggest shift in U.S. policy toward shipping technology to China since the 1990s. If effective, they could hobble China’s chip manufacturing industry by forcing American and foreign companies that use U.S. technology to cut off support for some of China’s leading factories and chip designers.

TSMC - Apple

TSMC, AMD, Nvidia, and other manufacturers impacted by U.S. strict export controls related to China

Deemed one of the most stringent shifts in policy since the 1990s, the new rules on chip-tech exports to China impact companies like TSMC, AMD, Nvidia, and other chip manufacturers.

TSMC reported a 48% revenue boost thanks to sales of Apple products, and it is expected to earn up to $19.4 billion in Q3, 2022. Since the Chinese government regards Taiwan as its territory, the new US also applies to the TSMC. At the moment, the impact of the U.S. new export control on the manufacturer’s business and earnings can not be estimated and it’s not known what will happen after the expiry of the 12-months exemption.

TSMC’s largest client Apple has also been diversifying its supply chain out of China by shifting the assembling of the latest products like the iPhone 14, AirPods and Beats to other Asian and East Asian countries like India and Vietnam.

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