Taiwan Imposes Trade Restrictions on Chinese Tech Giants
Taiwan has blacklisted Chinese technology companies Huawei and Semiconductor Manufacturing International Corp (SMIC), along with their subsidiaries, by adding them to its strategic high-tech commodities entity list. This move, reported by Bloomberg, requires Taiwanese companies to obtain government approval before exporting to these entities, potentially hindering China’s AI chip development efforts.
Background of the Restrictions
The decision to blacklist these companies comes amid escalating tensions between Taiwan and China. Taiwan President Lai Ching-te recently labeled China a “foreign hostile force” and introduced measures to counter infiltration. The US had previously designated Huawei as a ‘National Security Threat’ in June 2020, and SMIC has also been placed on the US entity list, significantly limiting their ability to acquire foreign technology.
Impact on Huawei and SMIC
The new restrictions could significantly limit Huawei and SMIC’s access to Taiwan’s plant construction technologies, materials, and equipment critical for producing AI semiconductors. This move may disrupt efforts by Taiwanese firms to assist Huawei in developing covert chip plants in southern China. TSMC, a key supplier for Apple and Nvidia, halted supplies to Huawei in 2020 due to US export controls.
Previous Developments and Future Implications
In 2023, Huawei and SMIC unveiled a 7-nanometer chip made in China, surprising US policymakers. Despite global restrictions, these companies remain China’s best hope for bridging the AI chip gap left by limited access to Nvidia’s advanced semiconductors. The updated list includes Huawei’s units in Japan, Russia, and Germany, further constraining their semiconductor ambitions.
The restrictions come as Taiwan continues to navigate its complex relationship with China, which claims Taiwan as its territory and has threatened unification by force. China has not yet responded to the new measures.
Conclusion
Taiwan’s decision to blacklist Huawei and SMIC marks a significant escalation in the technology trade war between China and the US, with Taiwan caught in the middle. The move underscores the geopolitical tensions surrounding advanced semiconductor technology and the critical role Taiwan plays in the global supply chain.
