Taiwan to Curb AI Chip Exports to China as Part of US Trade Deal

Taiwan is preparing to tighten export controls on AI chips to further align with US restrictions, according to a senior official in Taipei, joining a Trump administration clampdown on the smuggling of cutting-edge semiconductors to China.

Taipei plans to add artificial intelligence servers and cutting-edge semiconductors to a list of controlled items, Taiwan’s Minister of Economic Affairs Kung Ming-hsin told Bloomberg News. After the measures take effect, he said, shipping restricted AI hardware to China will become a criminal offense under the Foreign Trade Act.

“Going forward, some of our measures on controlled items will correspond to American ones because we have made quite some commitments in the Agreement on Reciprocal Trade,” Kung said in an interview on Oct. 12, referring to the trade deal that the US and Taiwan signed this year, though he declined to elaborate on when the government will implement the new measures.

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The US has long restricted Chinese purchases of AI chips from Nvidia Corp. and Advanced Micro Devices Inc., but companies in China have still managed to get their hands on the coveted accelerators through a sophisticated black market. US officials have alleged that billions of dollars’ worth of Nvidia hardware has made its way to China over the past few years.

Taiwan currently doesn’t treat unauthorized AI chip exports to China as a crime. While Taiwanese officials warn potential sellers that they may be violating US rules if they ship to China, the only legal recourse through the island’s courts is to charge suspected smugglers with violations of other, existing local laws.

Once the new measures are in place, the controls would be among the strictest measures from President Lai Ching-te’s administration to safeguard Taiwan’s technological and national security interests, as Taipei tests its comfort levels with more assertive policies — and manages pressure from American officials on multiple fronts.

Lai has previously said Taiwan will address unspecified US concerns over export controls, without offering details.

Local authorities were exploring more legal tools to address diversion of advanced hardware to enable Taiwan to prosecute AI chip smuggling to China as a criminal violation for the first time, Bloomberg News reported earlier this year.

Kung is one of the stewards of Taipei’s economic relationship with Washington, an alliance that helps counter Beijing.

This week, the minister also told Bloomberg News about plans to raise billions of dollars to develop industrial parks in the US, building a base for a comprehensive in-country supply chain for Nvidia and other AI hardware makers.

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