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Taiwan bans chip exports to Huawei, SMIC — ban comes after Huawei tricked TSMC into making two million AI processors despite US restrictions

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Taiwan’s International Trade Administration rubber-stamped the decision to tighten controls.

SMIC Shenzhen
(Image credit: SMIC)

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.

As entries on Taiwan’s blacklist, Huawei and SMIC are nestled among entities such as the Taliban and al-Qaeda, as well as a smorgasbord of other companies and organizations hailing from pariah nations like Iran, Russia, Afghanistan, and North Korea. According to sources like Bloomberg and Taiwan’s CNA, neither the newly blacklisted Chinese companies nor Taiwan’s economy ministry has shared comments on the new list.

Back in November, the U.S. requested that TSMC halt supplies of a range of advanced chips to Chinese customers. We also reported on a huge fine being levied upon TSMC for unknowingly supplying Huawei with two million compute chiplets for its Ascend 910-series AI processors. This weekend’s updated entity list might have been precipitated by negotiations about such matters behind closed doors.

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.

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Mark Tyson
Mark Tyson
News Editor

Mark Tyson is a news editor at Tom's Hardware. He enjoys covering the full breadth of PC tech; from business and semiconductor design to products approaching the edge of reason.

8 Comments Comment from the forums
  • gondor
    I had no idea that Taiwanese democratically elect their Commerce Ministry. Thanks for pointing that out Mark Tyson!
    Reply
  • Space Cadet
    TSMC "didn't know"? They used the oops no one told me line, lol. The great thing about the rule of law is it doesn't discriminate whose ordering even if TSMC is FULLY Aware. That includes when a registered company that's not known for ordering chips from a country that isn't sanctioned. That is on the powers to be to control that and unfortunately keeping the most powerful chips in the US will never happen after Taiwan gave the smack down on that so not much controlling is going to be happening.
    Reply
  • Notton
    Space Cadet said:
    TSMC "didn't know"? They used the oops no one told me line, lol. The great thing about the rule of law is it doesn't discriminate whose ordering even if TSMC is FULLY Aware. That includes when a registered company that's not known for ordering chips from a country that isn't sanctioned. That is on the powers to be to control that and unfortunately keeping the most powerful chips in the US will never happen after Taiwan gave the smack down on that so not much controlling is going to be happening.
    What is a "shell company"
    Even the best lock in the world can still be defeated by determined attackers.

    You're basically blaming the victim for a sophisticated attack, and one which the victim already paid a fine for.
    Reply
  • A Stoner
    Notton said:
    What is a "shell company"
    Even the best lock in the world can still be defeated by determined attackers.

    You're basically blaming the victim for a sophisticated attack, and one which the victim already paid a fine for.
    They submitted the exact same chip design to be manufactured as TSMC had already manufactured before. Every single one of these chips comes with many patents attached to them. There is 0 chance that TSMC did not know they were manufacturing these chips for China. No legitimate company on the planet would produce something they know has IP rights for someone else without proof that they are licensed for that IP. I am not a lawyer, so my verbiage might not be perfect on this, but my thoughts are spot on.
    Reply
  • phead128
    1 million AI processors will be enough for them for many many years. That's just one shell company that was caught.
    Reply
  • xabersl
    Wow. A political "tech news" with a load of bs.
    The move by Taiwan’s democratically elected government
    Yes. Thanks for reminding us. When I buy tech gadgets I always check on the government.

    pariah nations like Iran, Russia
    Really? Who gets to decide this list.. The West? If you say so..
    Reply
  • reaperofchange
    xabersl said:
    Wow. A political "tech news" with a load of bs.

    Yes. Thanks for reminding us. When I buy tech gadgets I always check on the government.


    Really? Who gets to decide this list.. The West? If you say so..
    Considering that mostly up to this point it has been our funding in the west, that has gone into the research and development of all this tech to reach the heights we see today, that china only has some of thanks to being contracted and payed to manufacture it, not develop it themselves, why wouldnt we regulate what we can while we can especially with the hostility being shown from china with the little power its gained and how puffy cheeked theyve gotten over it with zero humbleness for not being shoved aside and was provided a place to get out of the dark era it felt. Everyone else could have easily payed slightly higher prices and dealt with it while china would have been left in a really deep hole without a ladder. But no, it was given a ladder, and a hourse and some tools to rebuild itself and what does it do? It extorts and rips off everything it can from the hard work of everyone else and thinks its better than everyone for it while aggressively taking over lands around it just because of ancient maps that were considered ancient for a reason.

    With so much ip theft done by china without a doubt, how can anyone not understand the hesitation in allowing the most advanced tech not made or funded by china be allowed into its hand just so it can militarize it against everyone else? You would have to be uneducated to allow such or need surious psyciatric attention.

    With chinas obsession with the west and its determination to stand at the podium it lost to the west just so it can feel globally accepted is dangerous not just to the west but to the world because the amount of corners it cuts trying to get there. The regulations its never put in place for safety reasons that is already well established elsewhere. Of course we are going to regulate what we are responsible for that is mostly of our direct involvement for even existing that its even around to be useful for something.

    I want to see china be a strong nation thats successful and noone suffering at any level. Enjoying the fruits of life, and working alongside everyone globally to achieve great things. But not a china thats main focus is to dominate half the world just because of its prejiduce it has built through its carefully brainwashing systems and actively attempting to destroy global trade out of its grudge its had for far to long. And it wonders why it gets a rough time from others. How can it not see why. Its not something everyone does for no reason.
    Reply
  • ex_bubblehead
    A reminder to everyone to stick with the posted subject matter and leave the politics (of ANY kind) at the door, otherwise some folks will find themselves on the outside, looking in.
    Reply