In a significant escalation of the global tech rivalry, Taiwan has formally aligned itself with the United States by restricting the export of advanced semiconductor technologies to Chinese companies. On Sunday (June 15, 2025), Taiwan’s Ministry of Economic Affairs added Huawei Technologies and Semiconductor Manufacturing International Corp (SMIC), China’s leading chipmakers to its “Strategic High-Tech Commodities Entity List.”
This inclusion means Taiwanese companies must now obtain special permits before exporting any advanced chip technologies, manufacturing materials, or equipment to Huawei, SMIC, or their global subsidiaries. These subsidiaries span across Japan, Russia, and Germany, making the move internationally impactful.
The export control list is designed to prevent China from leveraging foreign chip technologies to accelerate its military and AI capabilities concerns echoed by both Taiwan and the United States. The action comes in the wake of the U.S. tightening restrictions on Nvidia’s H20 AI chips, adding another layer to the ongoing technology sanctions against China.
Huawei has been aiming to fill the void left by Nvidia’s restricted exports to China, positioning itself as the country’s AI chip alternative. However, Taiwan’s restrictions may now severely limit Huawei’s ability to scale or develop competitive technologies using Taiwanese tools and talent.
The decision also targets SMIC, which plays a critical role in fabricating chips for China’s growing tech ecosystem. With limited access to high-end equipment and materials, SMIC may now struggle to advance its manufacturing capabilities, especially in producing chips below the 7nm node, a critical threshold for advanced AI and military applications.
Taiwan’s move is likely to have ripple effects across the global semiconductor supply chain. For one, it protects the lead held by Nvidia, which has seen growing pressure from Chinese alternatives. Ironically, the restrictions also complicate Nvidia’s own market position, the company recently announced it would exclude China from future sales and earnings forecasts, citing increasing regulatory barriers.
Taiwan’s latest policy move not only underscores its strategic alliance with the U.S. but also highlights the growing fragmentation of the global tech ecosystem. As the U.S.-China chip war intensifies, Taiwan is emerging as a critical player in shaping the future of AI, national security, and global semiconductor competitiveness.
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