Taiwan Takes a Page From US Playbook, Tightens Grip on Core Tech Exports to China

Taiwan Takes a Page From US Playbook, Tightens Grip on Core Tech Exports to China
A closeup of a circuit board on display at the Macronix International Co. Ltd on in Hsinchu, Taiwan on Sept.16, 2022. Taiwan's semiconductor manufacturing capabilities are crucial to global supply chains, with megacap companies like Apple, Nvidia and Qualcomm heavily dependent on the island's exports. Taiwan accounts for some 60 percent of global semiconductor foundry revenue. Annabelle Chih/Getty Images
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As the United States strengthens its tech blockade of China, Taiwan has also introduced new regulations to prevent the export of key technologies to the Chinese communist regime.

Taiwan’s National Science and Technology Council (NSTC), on Dec. 5, issued a list of 22 key technologies that need to be protected.

This follows the Taiwanese government’s long-standing concerns about China’s espionage efforts to replicate Taiwan’s success in semiconductors and other core technologies.

The key technologies list includes defense technology, space, agriculture, semiconductors, and communications security.

The NSTC pointed out that Taiwan’s semiconductor industry maintains the largest market share in the world and is crucial in developing other new technologies.

The industry also greatly bolsters Taiwan’s economic development and competitiveness.

The announcement said the restrictions are only the first set of policies to address core technologies urgently needing protection.

Taiwan’s new regulations align with the United States’ policy on limiting the export of semiconductor chips and relevant technologies into China.

In 2021, more than 1 million Taiwanese businesspeople traveled to China and worked there. Such an example of extensive Taiwan-China trade ties has raised concerns from the United States that Taiwan’s semiconductors and other technologies may be at risk of being stolen by the Chinese regime.

U.S. Secretary of Commerce Gina Raimondo said at the Reagan Defense Forum on Dec. 2 that to prevent China from overtaking the United States in emerging technologies such as artificial intelligence and chips, the United States needs to strengthen its export controls and the enforcement of such controls.

She said that China was “the biggest threat we’ve ever had” and that “China is not our friend.”

Ms. Raimondo emphasized on Nov. 30 that national security will be prioritized over economic and political alliances with China.

She further expressed concerns over the Chinese regime’s continuing military build-up.

“Probably most disturbingly is they’re accelerating their efforts to fuse economic and technology policies with their military ambitions,” she said.

Commerce Secretary Gina Raimondo testifies during the Senate Commerce, Science, and Transportation hearing to examine CHIPS and science implementation and oversight, on Capitol Hill in Washington, on Oct. 4, 2023. (Saul Loeb/AFP via Getty Images)
Commerce Secretary Gina Raimondo testifies during the Senate Commerce, Science, and Transportation hearing to examine CHIPS and science implementation and oversight, on Capitol Hill in Washington, on Oct. 4, 2023. Saul Loeb/AFP via Getty Images
In Oct. of this year, the United States updated its regulations regarding the export of advanced semiconductors that might assist the Chinese Communist Party’s (CCP) military’s development of artificial intelligence.
In response, China criticized the export control since the regime views high-level semiconductors as essential for economic growth.

Setting China Back Years

The Epoch Times spoke with Chinese current affairs commentator Tang Jingyuan on Taiwan’s imposing export restrictions on semiconductors and high-end technology to mainland China.

Mr. Tang believes that the U.S. Department of Commerce’s imposition of semiconductor export restrictions on China has already had a significant impact.

“If Taiwan joins in on imposing restrictions, it would mean that Taiwan’s TSMC, the world’s largest semiconductor manufacturer, would significantly reduce its exports to China,” he said.

This would likely set back China’s chip ambitions by several years, he said.

A man walks past a company logo at the headquarters of the world's largest semiconductor maker, TSMC, in Hsinchu, Taiwan, on Jan. 29, 2021. TSMC has started building a semiconductor factory in Arizona. (Sam Yeh/AFP via Getty Images)
A man walks past a company logo at the headquarters of the world's largest semiconductor maker, TSMC, in Hsinchu, Taiwan, on Jan. 29, 2021. TSMC has started building a semiconductor factory in Arizona. Sam Yeh/AFP via Getty Images

“This will also significantly affect China’s development of key technologies such as 5G, supercomputing, and artificial intelligence, which will reduce the competition between China and the United States in the field of cutting-edge science and technology and further widen the technological gap between China and the United States,” said Mr. Tang.

“Leading Chinese tech companies, such as smartphone manufacturer Xiaomi, will have to raise the price tags on their chips, and it will be more difficult for the Chinese regime to achieve its goal of semiconductor independence,” he said.

“TSMC’s chip restriction may also indirectly affect the upgrade of China’s manufacturing industry, the competitiveness of China’s tech sector in the world, as well as the number of China’s export orders. This will result in a huge potential loss of GDP.”

Mr. Tang said the semiconductor restrictions would also hinder China’s military, as it won’t be able to acquire critical technologies in advanced computing and artificial intelligence.

“From a geopolitics perspective, Taiwan’s restrictions could trigger retaliation and increase regional tension,” he said. “Taiwan and the United States are constructing a ’technology Berlin Wall' by jointly implementing technological decoupling from the Chinese regime.”

Protecting US Interests

As the Chinese regime threatens to invade Taiwan and “reunify” the de facto independent nation with Mainland China, the fate of TSMC has been a focus for the West since China would have effective control of most of the world’s semiconductors if it invaded Taiwan, which it has repeatedly threatened to do.
Hoover Institution Research Fellow Kharis Templeman and FSI Center Fellow Oriana Skylar Mastro published a report in July that the United States should deepen its ties with Taiwan to protect the global supply chain of semiconductors.

The report suggested that deterring an invasion from the Chinese regime would be in the long-term interest of the United States since the stable supply of semiconductors is crucial in everything from artificial intelligence to smartphones, medical devices, cars, and fighter jets.