U.S. Grants Annual Export License for Chip Tools to TSMC’s Nanjing Facility—Geopolitical Tensions Thaw or Strategic Calculation?

Washington extends a critical lifeline to Taiwan's semiconductor champion in mainland China, renewing the export license for advanced chipmaking equipment at its Nanjing plant. The move signals a temporary détente in the ongoing tech cold war, allowing TSMC to maintain and potentially upgrade its operations across the strait.

Behind the Headlines

This isn't about generosity—it's about cold, hard supply chain calculus. Blocking tools to a TSMC facility would ricochet back, disrupting global electronics. The license renewal keeps the fabs humming, ensuring the flow of chips into everything from smartphones to servers. It's a managed concession, not a free pass.

The Fine Print & The Big Picture

The annual nature of the license is the real story. It's a short leash, giving U.S. regulators a yearly off-ramp to tighten controls if geopolitical winds shift. For now, it maintains a fragile status quo. TSMC secures operational certainty for another year, while Washington preserves its leverage. Everyone gets to pretend they're in control—classic geopolitical theater.

Forget 'decoupling'; this is strategic entanglement. The license underscores an inconvenient truth: complete tech separation is a fantasy that would crash markets faster than a leveraged crypto trader facing a margin call. The global economy remains wired together by silicon, and for now, that connection in Nanjing stays live.

Earthquake hits Taiwan sites while Nvidia pushes for more chips

Just as TSMC secured supply chain clearance for China, it had to manage a local disruption. The company said on Saturday that a small number of buildings inside its Hsinchu Science Park campus triggered emergency evacuation procedures after an earthquake.

In a public statement, the company said, “Prioritising personnel safety, we are conducting outdoor evacuations and headcounts in accordance with emergency response procedures. Work safety systems at all facilities are operating normally.” Operations elsewhere, including the main fabs, weren’t affected.

Meanwhile, Nvidia is leaning heavily on TSMC again. Cryptopolitan reported that Jensen Huang’s company is facing huge pressure after Chinese tech companies placed orders for over 2 million H200 chips, while Nvidia only has 700,000 units ready to ship.

That forced them to ask TSMC to start producing more of the H200 chips. Three people briefed on the situation allegedly said that mass production will likely begin by the second quarter of 2026.

There’s still a major hurdle. The chips haven’t been cleared by Beijing yet. And although Trump’s WHITE House lifted the previous export ban in November, shipments to China now come with a 25% tariff.

The clock is ticking while demand surges, and the production bottleneck could hit other Nvidia customers outside China.

Wall Street raises price targets on TSMC amid AI chip demand

Wall Street stays bullish on TSMC’s TSM stock though. On December 7, analysts at Bernstein bumped their price target for TSMC to $330, up from $290, maintaining an Outperform rating.

Their note explained that the reason was TSMC’s plan to boost Chip-on-Wafer-on-Substrate (CoWoS) output to 125,000 wafers per month by the end of 2026.

But Bernstein also warned that this won’t be enough to handle both Blackwell and Rubin, Nvidia’s upcoming chip designs for 2025 and 2026.

Then on December 10, Bernstein SocGen Group backed the same $330 target and said TSMC was beating both its own Q4 forecast and the market’s estimates right after the chipmaker reported NT$344 billion in November revenue, a 24.5% surge in a year.

Bank of America went even higher, setting their TSM price target at $360 and argued that TSMC is dominating production for both next-gen AI chips and new mobile processors, which are central to the ongoing demand in high-performance computing.

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