Taiwan Plans to Make AI Chip Exports to China a Criminal Offense Under U.S. Trade Deal
Taipei says it will add AI servers and cutting-edge semiconductors to its controlled-items list, making unauthorized shipments to China punishable under the Foreign Trade Act as part of commitments in its trade pact with Washington.
Taiwan is preparing to make it a crime to ship restricted artificial intelligence hardware to China, a move that ties Taipei’s export rules more closely to Washington’s as the Trump administration cracks down on smuggling of cutting-edge semiconductors.
Taiwan’s Minister of Economic Affairs, Kung Ming-hsin, told Bloomberg News that the island plans to add artificial intelligence servers and cutting-edge semiconductors to its list of controlled items. Once the measures take effect, unauthorized exports of that hardware to China would become a criminal offense under Taiwan’s Foreign Trade Act, he said.
“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. He was referring to the trade pact the United States and Taiwan signed this year, and he declined to say when the new controls would take effect.
Closing a smuggling loophole
The United States has long restricted Chinese purchases of AI chips from companies including Nvidia and Advanced Micro Devices, but Chinese buyers have still obtained the hardware through a black market. American officials have alleged that billions of dollars’ worth of Nvidia hardware has reached China over the past few years, according to Bloomberg.
Taiwan currently does not treat unauthorized AI chip exports to China as a crime. Officials warn would-be sellers that they may violate American rules by shipping to China, but the only legal recourse through Taiwan’s courts is to prosecute suspected smugglers under other, existing local laws. Taiwan detained suspected AI chip smugglers in May, according to Crypto Briefing.
U.S. investment and a Chinese response
The export-control shift would rank among the strictest technology measures taken by President Lai Ching-te’s administration to protect Taiwan’s technological and national security interests, Bloomberg reported. Lai has previously said Taiwan would address unspecified American concerns over export controls, without giving details.
Kung also told Bloomberg this week that Taipei plans to raise billions of dollars to develop industrial parks in the United States as a base for an in-country supply chain for Nvidia and other AI hardware makers. One early project is a complex in Texas that could cost as much as $4 billion, according to a Seeking Alpha report citing Bloomberg.
The move comes as Taiwan’s chip industry rides record demand: TSMC posted a record $23.6 billion third-quarter profit on surging orders for AI chips. On the same day Taipei’s plans were reported, China’s commerce and science ministries published a draft proposal to add 40 technologies, including 23 AI items, to China’s own export rules, according to Particle News.
Reporting based on coverage by Bloomberg News, Seeking Alpha, Crypto Briefing and Particle News.
