United States of America: Bureau of Industry and Security's order closing Validated End-User programme for foreign-owned semiconductor fabs in China enters into force

On 31 December 2025, the Department of Commerce’s Bureau of Industry and Security (BIS) order terminating the Validated End-User (VEU) programme takes effect. Since 2023, the programme has allowed certain foreign-owned semiconductor manufacturers to export most United States-origin goods, software, and technology to China without a licence, a benefit not available to United States-owned fabs. Under the new rule, all former VEU participants must obtain export licences for such transfers, with a 120-day window from the date of publication in the Federal Register to submit applications. BIS noted that licences may be granted to support the continued operation of existing semiconductor fabrication facilities in China, but not for capacity expansion or technological upgrading. The decision eliminates the VEU exemption and aligns licensing requirements for both foreign- and United States-owned semiconductor manufacturers exporting to China.