Taiwan’s Commerce Ministry on Saturday added Huawei and Semiconductor Manufacturing International Corporation (SMIC) to its list of restricted high-tech commodities, requiring export permits for shipments to the two Chinese tech giants. The move, reported by Tom’s Hardware, follows reports that Huawei circumvented U.S. Sanctions by using shell companies to commission Taiwan Semiconductor Manufacturing Company (TSMC) to produce advanced AI chips.
The restrictions come amid escalating concerns in Washington about the potential for a Chinese invasion of Taiwan and the catastrophic impact such an event would have on the global supply of semiconductors. According to a Recent York Times report published Tuesday, a cutoff of Taiwanese chip exports to American companies would cripple the U.S. Tech industry and the broader economy. U.S. Officials have repeatedly warned Silicon Valley about its overwhelming dependence on Taiwan, which currently produces approximately 90% of the world’s most advanced semiconductors, according to Taiwan News.
While already subject to U.S. Sanctions, the new Taiwanese restrictions further constrict Huawei and SMIC’s access to critical components. The Taiwanese government’s action places the two companies alongside entities such as the Taliban, al-Qaeda, and organizations from Iran, Russia, Afghanistan, and North Korea on its blacklist. Bloomberg and Taiwan’s CNA reported that neither Huawei nor SMIC have publicly commented on the new restrictions.
The move by Taiwan’s government is framed as a response to the weaponization of technology and ongoing trade tensions. The restrictions require both Huawei and SMIC to obtain export permits from Taiwanese suppliers to receive manufactured goods. This follows an incident where Huawei reportedly used shell companies to illicitly commission TSMC to manufacture two million advanced AI compute chiplets despite existing U.S. Restrictions.
In January, the United States and Taiwan reached a trade agreement intended to reduce tariffs on Taiwanese exports and encourage investment in the U.S. Technology sector, according to Reuters. The agreement, however, did not address the underlying geopolitical risks associated with Taiwan’s position as a dominant semiconductor manufacturer.
As of Tuesday, neither the U.S. Commerce Department nor the Taiwanese government has issued further statements regarding the potential for increased security measures or contingency plans in the event of Chinese military action.
