India, Aug. 27 -- According to Nikkei, citing sources, TSMC is removing Chinese chipmaking equipment from its leading-edge 2nm fabs to guard against potential U.S. restrictions that could disrupt production. As the report notes, sources said the decision was influenced by the prospect of a U.S. regulation that would bar chipmakers receiving American funding from using Chinese manufacturing tools.

The report adds that U.S. lawmakers, led by Sen. Mark Kelly, have proposed the Chip EQUIP Act, which would prohibit recipients of federal subsidies and tax credits from purchasing equipment from "foreign entities of concern," a label the industry understands to include Chinese suppliers.

As the report points out, Chinese equipment used by TSMC'...