Taiwan Semiconductor Manufacturing Co. (TSM), the world’s leading semiconductor chip manufacturer, is reducing its use of Chinese chipmaking gear in its most advanced plants. The move aims to avoid any risk from new U.S. rules that could affect production and global sales.
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TSMC Acts Early to Stay Clear of U.S. Chip Rules
The company is removing Chinese tools from its new 2-nanometer lines, which will start mass output this year. Earlier, it used some machines from firms such as AMEC and Mattson Technology. Now it is phasing them out as U.S. lawmakers push for tighter limits on tech that could aid China’s military or strategic goals. In addition, the U.S. is considering new export limits on firms that work with China.
Moreover, the Chip EQUIP Act would block any company that gets U.S. subsidies from using gear from “foreign entities of concern.” That list includes Chinese suppliers. Because of this, TSMC is reviewing all materials and chemicals in its plants in Taiwan and in the U.S.
Meanwhile, the rules target chips at 7nm or smaller, which are key for AI data centers. As a result, TSMC is acting early to keep access to subsidies and global markets. This plan also helps lower the risk of a sudden halt in production.
Policy Shifts Put Supply Chains in Focus
Looking at the wider market, the U.S. may also revoke waivers that let Samsung (GB:SMSN), SK Hynix, and others ship advanced tools to China. If that happens, suppliers will face more strain as makers seek safe sources for key gear.
TSM stock is near record highs this year as investors expect strong demand for leading-edge chips. However, supply chain moves like this show how policy now shapes chip production. While this adds cost and effort, it helps the firm secure its role in high-end tech and keep its edge in the global market.
What Is TSM’s Stock Price Target?
On the Street, TSMC boasts a Strong Buy consensus rating. The average TSM stock price target stands at $267.13, implying a 14.28% upside from the current price.
