On April 29, it was reported that Taiwan, China plans to strengthen the export control of advanced manufacturing technology, and the new measures will enforce the "N-1" technical restrictions, which will essentially prohibit TSMC from exporting its latest production nodes!

The revised rules are based on Article 22 of the revised Industrial Innovation Law and are expected to come into effect by the end of 2025. However, relevant departments have stated that the implementation date of the law will be announced within six months after the revision of each sub regulation, which means that it may be implemented as early as the end of 2025.

Prior to this revision, Taiwan, China regulations did not explicitly require such control of semiconductor manufacturing processes. These regulations are based on the revised Article 22 of the Industrial Innovation Law and are expected to come into effect by the end of 2025.

There are significant variables in TSMC's most advanced process technology. Currently, TSMC has a cutting-edge node: N3P (3nm) process. But by the end of this year, TSMC will begin using N2 (2nm) process to produce chips, which will become its flagship technology.

However, starting from the end of 2026, TSMC is expected to have two flagship nodes: N2P for client applications that do not require advanced power supply, and A16 (1.6nm) process equipped with Super Power Rail backside power supply for high-power HPC (high-performance computing) applications.

It remains to be seen whether Taiwan, China will ban the export of N2P and A16 (i.e. A14 and A16P nodes) within one year when TSMC launches follow-up products (i.e. A14 and A16P nodes).

The Taiwan, China Economic Department said that the date of implementation of the law would be announced within six months after the revision of the detailed rules. This means that implementation may begin as early as the end of 2025. The introduction of this regulation comes at a time when geopolitical risks are rising. Previously, TSMC announced plans to increase its investment in US production capacity from $65 billion over four years to $165 billion, but the specific time has not been disclosed.

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