TAIPEI -- Taiwan Semiconductor Manufacturing Co. is applying for permanent approval to ship U.S. chip equipment to its facility in Nanjing, China, after its one-year license for the plant received a temporary renewal, the chipmaker told Nikkei Asia on Friday.
"TSMC has been authorized to continue operating in Nanjing and we are currently in the process of applying for a permanent authorization for our operations in China," the world's largest chipmaker said. "We have been advised by the Bureau of Industry and Security (BIS) to apply for a Validated End-User (VEU) authorization, which would serve as a permanent authorization."
VEU authorizations have existed since 2007, but TSMC said it "did not need" to apply for such a license in the past. The BIS, under the U.S. Department of Commerce, is in charge of export controls.
"We expect to receive a permanent authorization through the VEU process," the company added.
The Taiwanese chipmaker received a one-year license to continue receiving U.S. equipment support for its chip facility in Nanjing last year. On Oct. 7 last year, the U.S. introduced sweeping export controls to block shipments to China of any new equipment that can make logic chips at the 14-nanometer level or better.
TSMC's Nanjing plant makes 12-nm and 16-nm chips -- generally considered to be on the same level as the 14-nm grade -- as well as less advanced 28-nm and 22-nm chips. The smaller the nanometer, the more advanced and powerful the chips are.
Washington's export controls not only prevent U.S. makers of chip tools from supporting high-end chip production in China but also prohibit companies from other places, like TSMC, from using American-made equipment to serve Chinese customers in certain circumstances unless approved by the U.S.
TSMC's application for a permanent license for its Nanjing plant comes with Washington preparing to further tighten its export controls. Huawei's unexpected release of a 5G-capable smartphone in August sparked alarm among policymakers, with Commerce Department Secretary Gina Raimondo calling the development "disturbing" and saying new tools were needed to curb China's tech ambitions.
