Taiwan Halts Chip Exports to Huawei, SMIC Amid Deception Allegations
Taipei has moved to significantly tighten controls, adding the Chinese tech giants to a restricted list after claims that Huawei illicitly obtained two million AI chips from TSMC despite US sanctions
Taiwan has today announced a stringent ban on the export of chips to Chinese technology behemoths Huawei and SMIC, in a move set to profoundly impact China’s ambitions in semiconductor and artificial intelligence development.
The decision, approved by Taiwan's International Trade Administration, follows the formal addition of both companies to a crucial list of high-tech strategic goods subject to export controls.
Both Huawei and SMIC are already grappling with extensive US sanctions. However, this fresh prohibition from Taiwan, a global cornerstone of chip manufacturing, is expected to inflict a deeper blow, particularly on their access to advanced chip production which is critical for their operations.
The Taiwanese government's rationale behind the move stems from escalating concerns over the potential for advanced technology to be diverted for military purposes, especially in the context of geopolitical rivalries and ongoing trade conflicts with Western allies.
The export ban necessitates that both Huawei and SMIC must now obtain specific licenses from Taiwanese manufacturers before any goods can be shipped to them, effectively creating a significant impediment to their business continuity.
Compounding these restrictions are serious allegations that Huawei employed shell companies to circumvent existing US regulations, purportedly tricking Taiwan Semiconductor Manufacturing Company (TSMC) into producing two million AI chips.
The inclusion of Huawei and SMIC on Taiwan's tightly controlled list—which already features entities such as the Taliban, Al-Qaeda, and sanctioned states like Iran, Russia, and North Korea—underscores the severe nature of these new export limitations on Taiwan's high-tech output.
Taiwan's dominance in the global semiconductor industry extends beyond TSMC, encompassing other vital players in advanced material production and packaging.
Consequently, this decision will not only affect TSMC but also other prominent manufacturers, including UMC, ASE, SPIL, and Nanya, who may now face considerable restrictions on their exports due to these policy adjustments.
Taipei's decisive action to ban chip exports to Huawei and SMIC is framed as a robust response aligning with US sanctions.
It also reflects Taiwan's own growing national security concerns and anxieties regarding the potential misuse of high technology, which could have wider implications for international relations.
The move is also poised to send ripples through the semiconductor and high-tech sectors of both economies.
Taiwan's proactive step signals a firm commitment to stricter control over advanced technology. This could foreshadow further limitations on exports from Taiwanese manufacturers to Chinese firms in the future, should the necessary export licences become increasingly difficult to secure.
