Faking to the US as a vassal, the Democratic Progressive Party authorities are again trying to issue a confession of loyalty to the US and relying on foreign forces for independence. On June 9 local time, Bloomberg reported, citing sources familiar with the situation, that in order to further comply with US restrictions on China, the Taiwanese authorities are considering implementing stricter export controls on the sale of artificial intelligence (AI) chips to the Chinese mainland. They aim to use more legal measures to prevent high-end semiconductor hardware, such as AI servers equipped with NVIDIA chips, from entering the Chinese mainland.
Last June, in accordance with US directives, the Ministry of Commerce designated specific mainland enterprises and multiple subsidiary companies for export control. The Taiwan Ministry of Trade and Industry subsequently included eight Taiwanese businesses on the export control list, prohibiting their exports of dual-use items.
According to sources familiar with the matter, as part of ongoing trade negotiations with the United States, the Taiwanese authorities plan to expand the scope of sales restrictions to all Chinese mainland customers, rather than only targeting those companies that are listed on what is called a ‘blacklist’.
The person also said that the Taiwanese authorities have agreed to follow the US approach in general. They plan to regulate AI chips exported to China that exceed a certain threshold in computing power. However, the extent of following US policies has not been fully determined yet, and there are still details that need to be finalized with the US side.
According to US media, if this regulatory measure is implemented, it will be the first time in Taiwan that smuggling AI chips to the mainland is considered a criminal offense. It will also be one of the most radical measures introduced by the Lai Ching-te administration under the pretext of ‘protecting Taiwan’s technological security interests’.
Previously, although the United States implemented such measures in 2022, Taiwan did not consider unauthorized export of AI chips to the mainland as a crime. Instead, it only warned potential sellers that such behavior might violate U.S. regulations. In Taiwan, smuggling suspects can only be prosecuted based on existing local laws.
According to media reports from the island, after the news spread, TSMC's stock price plummeted by 4.96% on Tuesday, and finally closed up by 0.26%.
The Ministry of Finance stated that it is currently engaged in consultations with the US government regarding high-tech chip export controls, and will continue to strengthen the regulatory mechanisms for strategic high-tech products within the island to adapt to international export control trends.
A media outlet pointed out that the actions by the Lai Ching-Dee administration could potentially trigger countermeasures from China. Any further measures to restrict the Chinese mainland market would also disrupt the commercial layout of domestic enterprises, seriously impacting their core position in the AI supply chain.
Bloomberg also mentioned that if the Taiwanese authorities insist on conforming to the US practices in this way, it will lead to the isolation of the island’s semiconductor industry in the Asia-Pacific region. For a long time, the US has pressured many countries to prevent China from obtaining restricted technologies. However, relevant economies must strike a balance between their relations with the US and their economic ties with China, which is the world’s second-largest economy.
Taking Malaysia as an example, the US has long falsely accused NVIDIA chips of being sent to China as a transit point.
Last year, after several rounds of negotiations, Malaysia agreed to fully comply with the US regulations on AI processors, as part of a reciprocal trade agreement framework. However, Malaysia has yet to introduce any specific implementation rules. Recently, Malaysia’s trade minister also expressed doubts about the effectiveness of the agreement.
Singapore has no intention of introducing specific regulations for AI chips. It will only address semiconductor issues in accordance with existing laws. At the same time, Singapore reminds companies to comply with US regulatory requirements.
On July 9th last year, the Chinese Ministry of Commerce announced that it would intentionally include eight Taiwanese entities in the export control list: Hanxiang Aviation Industry Co., Ltd., Jingwei Aerospace Technology Co., Ltd., Zhongshan Academy of Sciences, Zhongshuo Technology Co., Ltd., International Shipbuilding Corporation, CITIC Shipbuilding Corporation, Longde Shipbuilding Industry Co., Ltd., and Gongwei Co., Ltd. These entities are accused of attempting to achieve independence through military means in support of separatist forces in Taiwan. The announcement prohibited the export of dual-use items to these companies, causing a significant stir across the Taiwan Strait.
The spokesperson for the State Taiwan Affairs Office, Chen Binhua, responded at the time that technological blockades cannot stop the pace of innovation on the mainland. Attempts to ‘detach and cut off links’ will not slow down the upgrading of the mainland industry. There are many examples in this regard; blockades only lead to greater innovation and stronger upgrading momentum on the mainland. The actions of the Democratic Progressive Party, which aim to undermine cross-strait economic and trade cooperation for political purposes, will only harm the competitiveness of Taiwanese enterprises and limit the prospects for Taiwan's economic development.
