Taiwan Semiconductor Manufacturing Co (NYSE:TSM) shares edged higher Wednesday, rebounding from losses triggered by Washington’s decision to revoke the chipmaker’s authorization to freely ship critical equipment to its Nanjing, China, facility.
The U.S. government has revoked a waiver that allowed Taiwan Semiconductor to export essential chipmaking equipment and technology to its factory in Nanjing, China.
This policy change, which took effect on December 31, removes the company’s fast-track export privilege, known as validated end-user (VEU) status, CNBC reported on Wednesday.
Also Read: Taiwan Semiconductor Acts Early To Dodge US Export Curbs, Drops Chinese Tools From Chip Plants
Taiwan Semiconductor received the VEU exemption in 2022 after the Commerce Department initially restricted the sale of chipmaking tools of U.S. origin to China.
Under the new policy, Taiwan Semiconductor’s Nanjing facility must now obtain a U.S. export license for every shipment of American-made chipmaking equipment.
The Bureau of Industry and Security also canceled the VEU privileges for South Korean chipmakers SK Hynix and Samsung (OTC:SSNLF) on Friday.
According to Brady Wang, an associate director at Counterpoint Research, the financial impact on Taiwan Semiconductor “should be minor” because its Nanjing fab accounts for less than 3% of the company’s total revenue.
Despite geopolitical headwinds, investor sentiment toward Taiwan Semiconductor remains supported by strong demand tied to the global race in artificial intelligence infrastructure.
The company’s stock is up 16% year-to-date, reflecting optimism around surging capital expenditures from leading technology firms.
Microsoft (NASDAQ:MSFT), Meta Platforms (NASDAQ:META), and Apple (NASDAQ:AAPL) have pledged more than $250 billion in combined AI spending for 2025 and 2026.
Alphabet’s Google (NASDAQ:GOOGL) (NASDAQ:GOOG) has lifted its 2025 forecast to $85 billion, while Microsoft’s annual capital outlays now exceed $100 billion. Meta alone plans to spend close to $100 billion in 2026, underscoring the scale of investment driving demand for advanced chips.
Price Action: TSM stock is trading higher by 1.05% to $230.79 at last check Wednesday.
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