Shares of Taiwan Semiconductor Manufacturing Company (TSMC) fell by over 1% in pre-market trading on Wednesday following a report by Bloomberg indicating that the Biden administration is considering imposing additional export restrictions before the end of the president’s term.
The new measures are expected to affect semiconductor giants like TSMC, Samsung Electronics, and Intel Corporation. The proposed rules will require these companies to enhance customer due diligence processes to prevent chips from being diverted to restricted entities, such as Huawei Technologies.
The latest push for tighter regulations comes after reports revealed that TSMC-made chips were allegedly supplied to Huawei in violation of existing restrictions, sparking concerns about loopholes in the current system.
The U.S. is expected to introduce new licensing requirements for exporting chips with technologies at or below 14-16 nanometers to China and other sanctioned nations. The move aims to address these loopholes and tighten control over the flow of advanced semiconductor technology.
The potential new regulations are seen as part of a broader effort to enforce stricter export controls, including measures implemented earlier this week that limited the sale of advanced AI chips, such as those from Nvidia, to Chinese data centers.
With TSMC stock dipping in reaction to these reports, some investors may be considering whether it’s time to buy the dip, particularly as the company prepares to release its upcoming earnings report.
As TSMC faces the potential impact of these export restrictions, investors should weigh the potential long-term implications of these policies on the semiconductor industry and TSMC’s market position.
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