Taiwan has faced major challenges from the United States recently because the US government withdraws the VEU Express End User of Taiwan's Nanjing Factory (Fab 16). The latest research report by Macquarie analysts pointed out that Taiwan will fa...
Taiwan has faced major challenges from the United States recently because the US government withdraws the VEU Express End User of Taiwan's Nanjing Factory (Fab 16). The latest research report by Macquarie analysts pointed out that Taiwan will face operating risks in the short term, but the long-term impact is relatively limited.
The United States will impose strict restrictions on China's semiconductor equipment exports starting from 2022, and VEU may be an export convenience measure set by the United States for specific enterprises. It allows controlled technical equipment to be quickly closed to maintain supply chains. At that time, only special exemptions were given to companies such as Taiwan Electric, Samsung, SK Hynix and Intel. This exemption of the withdrawal is a signal that is tightened by the policy.
The US government has withdrawn the VEU rapid-to-release export permit of Taiwan Electric Power's Nanjing Factory (Fab 16), and is expected to take effect on December 31, 2025, which means that in the future, the semiconductor equipment that Taiwan Electric delivers US sources to Nanjing Factory will need to apply for approval on a case-by-case basis, and it is estimated that the uncertainty and time cost of equipment imports will be increased.
According to the latest research report of Macquarie analysts, NTD will face greater difficulties in obtaining circular manufacturing equipment without the VEU rapid-release export permission. Even if the permitted approval is delayed, the circular factory may face equipment shortage, which may interfere with its operation within a few months, but the production capacity of Nanjing factories accounts for a smaller proportion of the total capacity of Taiwan's electricity, so the long-term impact is limited.
After the news was exposed, the price of US semiconductor equipment stocks fell for a while, indicating that the market's concern about the upgrade of equipment export controls. Economic Minister Yeo Mingxin pointed out that Nanjing factories account for about 3% of Taiwan's total electricity capacity, so the short-term impact is limited, and the impact on Taiwan's overall semiconductor competition is also low. If necessary, the government will provide necessary assistance.
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