Taiwan eyes tighter AI chip export controls to China amid U.S. pressure

Taiwan is reportedly considering a substantial tightening of its export controls on artificial intelligence chips destined for China, a move that would align with the United States' strategy to curb Beijing's technological ambitions. Sources suggest that Taiwanese authorities are discussing measures to restrict the sale of certain high-performance AI chips and servers to Chinese companies.

If implemented, these controls would represent the most extensive restrictions under the new administration of President Lai Ching-te, significantly impacting the flow of advanced technology to China. This would also elevate Taiwan's role in the U.S.-led semiconductor export control regime. Last year, Taiwan already placed Huawei and China's largest foundry, SMIC, on an export control list, requiring government permits for transactions. However, the proposed measures are broader, targeting the entire Chinese market to prevent the indirect transfer of high-performance AI chips and servers through third countries like Hong Kong or Japan.

Currently, exporting AI chips to China is not explicitly illegal in Taiwan, though sellers can be warned about violating U.S. restrictions. The proposed plan would allow Taiwanese authorities to treat such smuggling as a criminal offense. This decision presents a complex balancing act for Taiwan, a global hub for AI chip manufacturing, with its semiconductor industry being a cornerstone of its economy. The government is reportedly hesitant to impose measures that could excessively restrict its domestic companies' activities, even as it signals a willingness to cooperate with U.S. policy. The Ministry of Economic Affairs confirmed ongoing discussions with the U.S. regarding the regulation of advanced chips, pledging to enhance oversight of strategic high-tech goods.

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Taiwan and the United States are continuously discussing issues including including advanced chips in the scope of regulation. We will strengthen supervision of strategic advanced technology goods.