Apple’s major chip supplier, TSMC, has been given a reprieve from the U.S. restrictions on high-tech chip exports to China. Despite the stricter export controls, the new policy grants exemptions to some companies, including TSMC.
Chip Supplier TSMC Gains Exemption to New U.S. Export Law
According to the Wall Street Journal, the stricter export policy is part of Washington’s measures targeting almost every aspect of China’s semiconductor industry. The U.S. government views the issue as an arena of increasing strategic competition. This affected TSMC, Apple’s major chip supplier, as its stock fell to an almost two-year low this week. Investors were anxious about the impact of the U.S. restrictions on exports to China. The restrictions apply to high-tech chips and the tools needed to manufacture them.
During its recent earnings call, however, chip supplier TSMC announced record-breaking earnings for the third quarter. The company also announced that it has been exempted from the new export controls the U.S. placed on China. The exemption is valid for 12 months. However, what would happen after the exemption period expires remains uncertain. In the meantime, TSCM can continue with its normal operations.
Companies Can Still Sell Older Tech to China
The new U.S. law prohibits the export of advanced technology to China-based companies. This means chip supplier TSMC and other companies can still sell older technology in China, but they can no longer sell new ones. The new law was promulgated as part of U.S. President Biden’s attempt to bolster the production of U.S. semiconductors. The Biden administration also hopes the new law will guard against possible security issues later on.
Going back to TSMC, the company has not made any announcement on what it plans to do when the 12-month exemption expires. The company reported its net profits increased by 80%. Being the world’s largest semiconductor manufacturer, the stricter regulations could certainly impact its profits should the exemption lapse.