Taiwan moves to make smuggling AI chips to China a crime

Taiwan plans to sharply tighten controls on exports of advanced AI chips and servers to China. Economic Affairs Minister Kung Ming-hsin confirmed to Bloomberg that both product groups will be added to the island's list of controlled items, making unauthorized shipments to China a criminal offense under the Foreign Trade Act. Kung gave no timeline.

Taiwan currently has no direct criminal penalty for unauthorized exports of such chips to China, leaving prosecutors to rely on other laws. Kung said the measures would correspond with those of the United States and are based on the trade agreement signed with Washington this year. Reports say officials are also weighing extending the controls beyond listed companies such as Huawei and SMIC to all relevant customers in China.

The move follows cases of alleged chip smuggling. Bloomberg reported that Nvidia processors have reached Chinese buyers despite U.S. restrictions through networks in Southeast Asia, and a U.S. Justice Department case involves at least $2.5 billion worth of Nvidia chips allegedly smuggled to China.