Taiwan blacklists China's Huawei, SMIC; tightens chip export controls amid US-China tensions

Taiwan has placed Chinese tech giants Huawei Technologies and Semiconductor Manufacturing International Corp (SMIC) on its export control list, a move that brings the island’s trade policy further in line with the United States and could significantly impact China’s ambitions in artificial intelligence chip development.

The update to Taiwan’s “Strategic High-Tech Commodities Entity List” was confirmed by the island's International Trade Administration and means that local firms must now obtain government approval before exporting sensitive technologies, materials, or equipment to Huawei, SMIC, or their subsidiaries. According to Bloomberg, this restriction could delay China’s efforts to build advanced AI semiconductors, as both firms lose access to critical Taiwanese plant construction technologies and semiconductor equipment.

The updated list, published on Sunday, now includes entities previously associated with global security threats, such as the Taliban and al-Qaeda, as well as firms based in Iran and China, the Associated Press (AP) reported.

Both companies are already blacklisted by the US government and face sweeping American restrictions on access to advanced chips and manufacturing tools. Taiwan’s largest chipmaker, Taiwan Semiconductor Manufacturing Co (TSMC), has long adhered to US export rules and has faced scrutiny over its past dealings with Chinese firms.

In October 2024, a controversy erupted when research firm TechInsights discovered a TSMC-manufactured chip inside a Huawei AI training card. Following the revelation, the US Commerce Department reportedly ordered TSMC to cut off Chinese clients’ access to AI-specific chips, according to Reuters. The company could also face a fine of up to $1 billion in connection with a US investigation into the incident.

Huawei has since attempted to develop homegrown alternatives to Nvidia’s GPU offerings, aiming to supply AI chips domestically. However, experts believe the Chinese tech ecosystem continues to struggle with limitations in scale, technological maturity, and supply chain constraints due to ongoing export controls.

Taiwan’s decision comes amid growing geopolitical strain with Beijing. While China claims the self-ruled island as its territory, the US remains Taiwan’s largest unofficial ally and arms supplier, further complicating the island’s strategic position in the global semiconductor supply chain.

Taiwan is also home to TSMC, the world’s largest contract chipmaker and a key supplier to companies like Nvidia. The country’s latest export control update reinforces its alignment with US policy at a time when chip technology has become a central front in the broader struggle between Washington and Beijing over technological dominance.