Taiwan Semiconductor Manufacturing (TSM) is removing Chinese chipmaking equipment from its most advanced fabs to prevent potential US restrictions from disrupting production, Nikkei Asia reported Monday, quoting sources.

The company will exclude Chinese equipment from its cutting-edge 2-nanometer chip production lines, set for mass production this year, the report said, adding that production will begin in Hsinchu, Taiwan, followed by Kaohsiung, with a third plant under construction in Arizona to eventually produce these chips as well.

The report added that this decision was driven by a potential US regulation that may ban chipmakers receiving American funding from using Chinese manufacturing equipment.

Meanwhile, notable Chinese equipment used in the company's earlier advanced chip production lines includes etching tools from Advanced Micro-Fabrication Equipment China and Mattson Technology.

In a response to MT Newswires, a Taiwan Semiconductor spokesperson said they do not comment on market rumors.

"As always, TSMC's global procurement strategy focuses on robust risk management systems and close partnerships with suppliers to continuously develop multi-source supply solutions and diversify its global supplier base," the spokesperson said.

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