Overview

• Taiwan’s Ministry of Economic Affairs placed Huawei and SMIC on its strategic high-tech commodities entity list, requiring special permits for any chip exports
• The updated controls mirror US sanctions and aim to close loopholes that allowed Huawei’s shell companies to procure advanced AI processors from TSMC
• Major Taiwanese vendors including UMC, ASE, SPIL, and Nanya Technology now face heightened scrutiny under the new export regime
• Beijing is expected to retaliate through measures such as restricting rare-earth mineral exports or broader economic countermeasures
• Analysts warn the restrictions could hamper China’s AI development by cutting off its access to next-generation semiconductor components