TSMC Stock Hits Record High as US Grants Key China Export License
The annual approval for its Nanjing facility removes a significant regulatory overhang, ensuring operational stability for the world's largest chipmaker amid ongoing tech tensions.
Taiwan Semiconductor Manufacturing Company (NYSE: TSM) shares surged to a new 52-week high on Friday, as investors cheered the U.S. government's decision to grant an annual export license for the company's chip manufacturing plant in Nanjing, China. The move resolves a key point of regulatory uncertainty that had been weighing on the world's most valuable semiconductor company.
Shares of TSMC jumped more than 5.6% in Friday trading, closing at $321.17 after setting a new 52-week high. The rally was ignited by news that the U.S. Department of Commerce had approved a one-year license, allowing the company to continue securing U.S.-made chipmaking equipment for its Chinese facility. This approval ensures operational continuity at the plant, which had been operating under a temporary exemption that expired at the end of 2025.
The new license replaces the previous "validated end-user" (VEU) authorization. According to reports from Times of India, this shift signals a new U.S. policy of maintaining oversight on legacy chip production in China through an annual review process, while severely restricting access to advanced technologies.
While the Nanjing facility is not one of TSMC's cutting-edge foundries—it primarily produces mature-node semiconductors at the 16nm and 28nm process nodes—its stability is important for the company's global strategy. The plant is responsible for a fraction of TSMC's total revenue, estimated at around 2.4% in 2024, but serves key customers within the Chinese market. Securing the license removes a significant operational headache and allows TSMC to reliably fulfill its long-term supply commitments.
The market's reaction was swift and positive, building on pre-market gains where the stock rose approximately 2.7%. The approval was viewed as a crucial de-risking event, providing a clear framework for the company's China operations for the next year. The move brings TSMC in line with its South Korean competitors, Samsung Electronics and SK Hynix, which received similar one-year authorizations from the U.S. for their respective China facilities.
This decision provides a measure of stability amid the persistent tug-of-war between the U.S. and China over semiconductor technology. Washington has sought to curtail China's ability to produce advanced chips for artificial intelligence and military applications, while allowing the production of less sophisticated, legacy semiconductors to continue to avoid disrupting global supply chains for consumer electronics and automotive components. As GuruFocus noted, this annual licensing model gives the U.S. government a mechanism for regular monitoring and leverage.
Wall Street has maintained a bullish outlook on the chipmaking giant. Based on recent analyst data, of 17 analysts covering the stock, 15 rate it as either a 'Buy' or 'Strong Buy', with an average price target suggesting further upside. With a market capitalization now exceeding $1.5 trillion, TSMC's central role in the global technology ecosystem—manufacturing chips for clients like Apple, Nvidia, and AMD—is undisputed.
Looking forward, while the immediate hurdle has been cleared, the annual nature of the export license means that its renewal will become a recurring event for investors to monitor. For now, the approval provides TSMC with the predictability needed to navigate the complex geopolitical landscape while continuing to dominate the semiconductor manufacturing industry.