Taiwan Cracks Down on Chinese Tech Firm Huawei, Deals Blow to Beijing's AI Chip Ambitions

TAIPEI, TAIWAN - In a move that is expected to deal a significant blow to China's efforts to develop cutting-edge AI chip technologies, Taiwan has blacklisted two prominent Chinese tech firms - Huawei Technologies Co. and Semiconductor Manufacturing International Corp. (SMIC) - by including them in an update of its strategic high-tech commodities entity list.

The change requirements Taiwanese companies to obtain government approval before exporting to listed entities, significantly limiting the companies' access to advanced chipmaking technologies and materials, particularly those manufactured by Taiwan Semiconductor Manufacturing Co. (TSMC).

This latest move comes on the heels of a report by Bloomberg that revealed several Taiwanese firms were assisting Huawei in developing a covert network of chip plants in southern China. The ban on exporting chipmaking equipment to China was already in place before this new development.

The updated list also includes Huawei's units in Japan, Russia, and Germany, highlighting the global scope of Beijing's efforts to develop its AI chip capabilities. Despite facing significant restrictions from both Taiwan and the US, Huawei remains one of China's best hopes for bridging the gap left by limited access to Nvidia's advanced semiconductors.

The move is seen as a strategic response to escalating tensions between Taiwan and China, with Taiwanese President Lai Ching-te labeling China a "foreign hostile force" earlier this year. Beijing has not yet responded to the new measures, which come as part of broader efforts to counter infiltrations by Chinese forces.

China claims Taiwan as its territory and has threatened unification by force, but the ban on Huawei serves as another tangible manifestation of the island's efforts to maintain its sovereignty in the face of growing military and economic pressure from Beijing.