Soon after the company reported record profits, made mostly by manufacturing iPhone processors, Apple’s chip partner TSMC also announced that it had been granted an exemption from new US laws that ban the export of high-end manufacturing equipment and technology in China.
While presenting the quarterly results, where record returns were announced for the third quarter of 2022, TSMC also revealed that it had received a one-year exemption from the new ban law. This means that TSMC joins Samsung and SK Hynix, who have received the same treatment.
New US law prohibits the export of anything described as advanced technology to companies based in China. In general, this means that while ancient technology can still be sold to Dragon Land, newer and more advanced technology cannot. Note that the new law considers Taiwan subject to the same restrictions as China.
There were no details from TSMC, the US Commerce Department, or any other companies that received the exemption, as to what would happen after 12 months. In the meantime, businesses will operate normally. The waivers are intended to prevent bottlenecks in global chip production, which are already suffering.
TSMC is the world’s largest semiconductor manufacturer. According to the Wall Street Journal, its latest financial report shows an 80% increase in net profit. Net income for the third quarter of 2022 was $8.83 billion, compared to $4.92 billion in the same period in 2021. Revenue increased 48% and operating profit margin increased 9.4 percentage points to 50.6%.
However, the US export law had two effects on TSMC. First, TSMC’s stock has fallen in value since the law was introduced, and the company has lowered its growth plans. TSMC forecasts between $40 and $44 billion in capital expenditures on investments for the full year. Estimates have now been reduced to $36 billion.
Separately, Apple recently accepted TSMC’s plans to raise its prices starting in 2023.