Two of the companies most important to China’s semiconductor self-sufficiency and AI supremacy hopes were dealt a blow on Saturday, when Taiwan added them to its strategic high-tech commodities entity list.
Huawei and SMIC have already been sanctioned by the U.S., but the constriction of supplies from the Silicon Island could prove very meaningful and impactful. This news also comes in the wake of Huawei using shell companies to deceive TSMC into manufacturing two million banned advanced AI compute chiplets. Stricter government controls should prevent similar mistakes in the future.
The move by Taiwan’s democratically elected government, specifically the Taiwan Commerce Ministry, isn’t particularly surprising, given the ongoing trade war sparked by concerns over the weaponization of cutting-edge technologies against Western allies. From now on, both Huawei and SMIC will need to obtain export permits from suppliers based in Taiwan to receive manufactured goods.
Taiwan is home not only to the most famous element of the silicon shield, TSMC, but also to a host of other key semiconductor firms working on everything from materials to advanced packaging. It isn’t just TSMC products that may be cut off from Huawei and SMIC; exports from established industry players, such as UMC, ASE, SPIL, Nanya, and others, will also be subject to the new restrictions.
