US tightens chip scrutiny as TSMC, Samsung face pressure

US scrutiny of the global chip sector is rising, with focus on TSMC and Samsung ahead of their earnings next week.

Washington recently revoked waivers allowing TSMC, Samsung, and SK Hynix to use US technology in China, raising concerns about supply chain risks.

Bloomberg Economics said Samsung could be hit harder than TSMC due to its higher exposure to China, though it may see gains from supplying chips to OpenAI’s Stargate project.

China has introduced new restrictions on rare earth exports critical to chipmaking.

TSMC reported stronger-than-expected Q3 2025 sales, driven by demand for Nvidia’s Blackwell products and early orders ahead of tariffs.

Analysts are watching for updates on its gross margin trends and the impact of recent US policies on outsourcing and supply chains.

🔗 Source: Bloomberg

🧠 Food for thought

Implications, context, and why it matters.

TSMC’s Nanjing plant has limited financial impact after waiver revocation

Nanjing makes about 3% of TSMC capacity, and China operations delivered 2.6% of profits in the first half of 2025 1. The US export-control waiver loss brings uncertainty, yet direct earnings risk stays small.
The site runs 16 nm and 28 nm lines 1, far from TSMC’s leading edge. Chinese buyers made up 11% of $90.08 billion in 2024 sales 1.
A 120-day transition lets firms seek individual licenses 2. The US Commerce Department plans to grant permits that keep current work going while blocking capacity growth or technology upgrades 2.
TSMC may swap some US tools for Chinese gear to stay online 1. China still lacks lithography for 16 nm, which limits full localization 1.

Chinese foundries may absorb work during licensing delays

A pullback in Nanjing could steer orders to Semiconductor Manufacturing International Corp. at 14 nm or 28 nm, with Hua Hong Semiconductor at 28 nm 1. Auto and specialty chips fit these nodes.
License queues at the US Bureau of Industry and Security, part of the Commerce Department, add wait time 2. That uncertainty nudges designers and device makers to try suppliers that do not rely on US inputs.
Materials and equipment vendors outside US jurisdiction could win share by serving Chinese fabrication plants, though China’s new export curbs on rare earths and other critical minerals complicate sourcing for all chipmakers.