On September 2, 2025, Bloomberg reported that the Bureau of Industry and Security (BIS) under the U.S. Department of Commerce had revoked the 'Validated End-User' (VEU) authorization for TSMC's Nanjing factory. This decision is slated to come into effect on December 31, 2025.

As a result, TSMC's upstream suppliers shipping goods to the Nanjing factory will now be required to apply for U.S. licenses on an individual, case-by-case basis. Given the uncertainties surrounding the approval process—including the duration of the approval cycle and potential queuing times—this development could pose challenges to the factory's operations in the near term.

However, it's worth noting that the production capacity of the Nanjing factory represents a relatively small share of TSMC's overall revenue. This limits the potential long-term impact of the license revocation.

Nonetheless, the escalation of export controls has sparked market concerns. This move not only tightens U.S. semiconductor restrictions on China but also has ripple effects on the global supply chain. Fortunately, TSMC's diversified global layout can help cushion some of these impacts.