US Grants Key Export License to TSMC, Bolstering China Operations

TSMC US8740391003

Taiwan Semiconductor Manufacturing Company (TSMC) has received significant regulatory news from Washington as it moves into the new year. The U.S. Department of Commerce issued a one-year export license to the chipmaking giant, providing clarity for one of its key manufacturing facilities.

The license, granted on Friday, allows TSMC to continue shipping American semiconductor manufacturing equipment to its Fab 16 plant located in Nanjing, China. This general authorization eliminates the need for the company to seek individual approvals for each shipment, removing a layer of regulatory uncertainty that had been looming. The facility focuses on producing more mature chip technologies, specifically those based on 16-nanometer and 28-nanometer processes. While not part of TSMC's leading-edge portfolio, these nodes contribute approximately 2.4 percent to the firm’s total revenue. The approval ensures production continuity and operational stability amid ongoing geopolitical tensions.

This new permit effectively replaces TSMC’s previous "Validated End User" status, which was set to expire on December 31, 2025. With this decision, U.S. authorities are extending treatment to the Taiwanese company that aligns with what was already granted to its South Korean rivals, Samsung Electronics and SK Hynix, who operate under similar licenses.

Advanced 2nm Production Ramps Up

In a separate but concurrent development, TSMC has formally announced the commencement of volume production for its next-generation 2-nanometer chips. The manufacturing ramp-up began in the fourth quarter of 2025 at the company’s Fab 22 in Kaohsiung.

This new 2nm technology, which utilizes first-generation nanosheet transistors, promises substantial gains in performance and power efficiency. These advancements are considered particularly critical for powering artificial intelligence applications and next-generation mobile devices. Major clients, including Nvidia and Apple, are expected to be among the first to adopt these chips.

Internal company projections suggest that revenue generated from the 2nm process node could surpass that of its 3nm and 5nm predecessors as early as the third quarter of 2026.

Focus Turns to Financial Outlook

Investor attention will now shift to TSMC’s upcoming earnings presentation scheduled for January 15, 2026. This event will serve as a key test, providing the market with the company’s official investment plans and a detailed roadmap for the 2nm production ramp. The dual tailwinds of resolved regulatory concerns and a successful transition to advanced manufacturing position TSMC favorably within the high-growth AI semiconductor segment.