The Taiwanese government has blacklisted Chinese chipmaking firms Huawei Technologies and Semiconductor Manufacturing International Corporation (SMIC) due to “concerns over national security”, trade officials say.
The two companies were part of a list of 601 entities from countries such as Russia, Pakistan, Iran, Myanmar, and China which Taiwan added to its strategic high-tech commodities (SHTC) export control list, the economy ministry’s trade administration told state-backed Focus Taiwan.
Inclusion on the list means Taiwanese companies will now need government approval before exporting any products to the companies.
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That would effectively cut-off the two Chinese firms from the world’s largest contract chipmaker, Taiwan Semiconductor Manufacturing Company (TSMC).
Several of Huawei’s foreign subsidiaries including those in Japan, Russia and Germany have also been added to the list, according to Taiwanese business newspaper Economic Daily News (EDN).
The addition comes at a time when China is making an aggressive push to develop its own chipmaking ability and catch up with the US in the production of advanced artificial intelligence chips. Beijing remains cut-off from top tier AI semiconductors — and the technology required to make them — in light of wide-ranging export controls implemented by the United States.
The US’ measures prevent not just American chip firms from doing business with Chinese companies working in the AI space, but also foreign companies that use American technologies to make chips and chipmaking tools.
In a statement on Sunday, the ministry’s trade administration said it had recently held a meeting to review the entity list, and “based on the prevention of arms proliferation and other national security considerations” updated it on June 10.
“Manufacturers must comply with export control regulations, fulfill their verification obligations and carefully assess transaction risks,” it added.
The export controls list also includes on it organisations like the Taliban and Al Qaeda.
In an editorial on Monday, Beijing mouthpiece China Daily decried Huawei and SMIC’s addition to the entity list as a move that would ‘sell out the island’s interests’.
It called Taiwanese claim that the addition intended to prevent arms proliferation was “nonsense”, and that the ruling Democratic Progressive Party (DPP) was looking to “curry favour” with the Donald Trump administration in the US instead.
Already troubled ties
Democratically-governed Taiwan, which Beijing claims as its own territory, already has tight chip export controls when it comes to Taiwanese companies either manufacturing in China or supplying Chinese firms.
Taiwan’s government has repeatedly vowed to crack down on what it says are efforts by Chinese companies, including SMIC, to steal technology and entice chip talent away from the island.
Meanwhile, Huawei is on a US Commerce Department trade list that essentially bars it from receiving US goods and technology, as well as foreign-made goods such as chips from companies like TSMC made with US technology.
Last October, TechInsights, a Canadian tech research firm, took apart Huawei’s 910B AI processor and found a TSMC chip in it. The multi-chip 910B is viewed as the most advanced AI accelerator mass-produced by a Chinese company.
TSMC suspended shipments to China-based chip designer Sophgo, whose chip matched the one in the Huawei 910B.
In November, TSMC notified all its Chinese clients it would stop producing their most advanced AI semiconductors on an immediate basis. The decision came on the back of a US order.
- Reuters, with additional editing and inputs from Vishakha Saxena
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