Taiwan Weighs New AI Chip Export Curbs to Align With US Crackdown on China

Taiwan Tightens the Screws on AI Chip Exports

Taiwan is weighing new export controls on advanced AI chips bound for China, a move designed to close loopholes that have allowed cutting-edge semiconductors to be quietly diverted from the island to Chinese buyers. According to a Bloomberg report, the proposed measures would hand Taiwanese authorities more legal firepower to combat semiconductor smuggling and bring the island's trade policy into closer alignment with US restrictions on China's access to AI hardware. Shares of TSMC, the world's most advanced chip foundry, slipped following the report.

A Crackdown Born From Real Cases

The deliberations come just weeks after Taiwan's first-ever enforcement action against chip smuggling. In late May 2026, authorities detained three individuals accused of forging export documents on Super Micro Computer servers packed with Nvidia GPUs, then routing them to China, Hong Kong, and Macau via Japan. Prosecutors allege the suspects falsified customs paperwork to hide the AI chips inside the servers, circumventing US export controls.

That case echoed a March 2026 US Department of Justice indictment of Super Micro co-founder Wally Liaw and two associates over an alleged $2.5 billion GPU smuggling conspiracy involving Nvidia-powered AI servers shipped to Chinese customers.

Falling Into Step With Washington

Taiwan has steadily hardened its export controls over the past year. In June 2025, its Ministry of Economic Affairs added Huawei and Semiconductor Manufacturing International Corporation (SMIC) to its strategic high-tech commodities entity list, requiring local companies to obtain permits before exporting to those firms.

The latest considerations land amid intensifying pressure from Washington. A bipartisan pair of US senators recently urged the Bureau of Industry and Security to examine whether contract chipmakers like TSMC could be exploited by Chinese subsidiaries placing custom chip orders overseas. The US Commerce Department has also reaffirmed that AI chip licensing rules apply to all enterprises headquartered in China, including their overseas arms.

What's at Stake for the Supply Chain

The moves underline how Taiwan, home to the world's most advanced foundries, has become a central node in enforcing the technology blockade against Beijing. TSMC's chief executive warned earlier this month that global chip supply will fall short of AI-fuelled demand for years, raising the stakes of any further limits on where those chips can flow. With China accusing the US of destabilising the supply chain and military pressure mounting around the island, the politics of silicon have rarely been more fraught.