Taiwan plans to make AI server exports to China a crime
Kung Ming-hsin, Taiwan's minister of economic affairs, named cutting-edge semiconductors alongside AI servers and cited a U.S. trade deal signed in February.
Key takeaways
Taiwan plans to add AI servers and cutting-edge semiconductors to its controlled-items list, so that shipping the restricted hardware to China would be a criminal offense once the rules take effect.
Kung Ming-hsin, Taiwan's minister of economic affairs, said so in an Oct. 12 interview with Bloomberg News, which published the account on Friday. He declined to say when the government would act.
The commitment he cited is the Agreement on Reciprocal Trade, signed by the United States and Taiwan on Feb. 12. It calls for Taiwan to align its export controls with U.S. rules and to publish further measures against the diversion of advanced semiconductors and advanced computing items.
"Going forward, some of our measures on controlled items will correspond to American ones because we have made quite some commitments in the Agreement on Reciprocal Trade," Kung said.
The penalty he pointed to is already in Taiwan's Foreign Trade Act. Unauthorized export of strategic high-tech goods on the controlled list can bring up to five years in prison, a fine of up to 3 million New Taiwan dollars, or both. An unauthorized shipment of AI chips to China is not, by itself, a crime in Taiwan today, Bloomberg reported. Taiwanese officials warn sellers they may be breaking U.S. rules. To take a case to court, prosecutors have had to use other laws.
That is what a live case shows. On Aug. 24, prosecutors in Keelung, a port city in northern Taiwan, indicted managers, including a distribution manager at Nvidia's Taiwan office and sales managers at Super Micro Computer's Taiwan branch, over sales of Super Micro servers built with Nvidia's B300 chips to buyers in China. The shipment itself was not the charge. Prosecutors brought breach of trust and forgery, and said false end-user documents claimed the servers would be installed at a rented facility in Taiwan.
The Keelung charges reached the people who moved the servers, not the company that makes the chips. Reuters reported in November 2024 that the U.S. Commerce Department ordered Taiwan Semiconductor Manufacturing (TSMC) to halt shipments of certain advanced chips to Chinese customers used in AI applications. On June 10, TrendForce passed on a Bloomberg report that TSMC is already barred from making those chips for Chinese customers, and that current rules do little to stop servers carrying them from reaching China later. That later shipment is what Kung's plan would make a criminal offense.
The interview gave no performance threshold and no list of chips. The categories still have to be published in the government gazette before they bind anyone. Until that notice, the interview does not change what a shipper can be charged with.
Frequently asked questions
Is shipping AI chips to China already a crime in Taiwan?
An unauthorized shipment of AI chips to China is not, by itself, a crime in Taiwan today.
What penalty would apply once the hardware is on the controlled list?
Unauthorized export of strategic high-tech goods on the controlled list can bring up to five years in prison, a fine of up to 3 million New Taiwan dollars, or both.
When do the new rules take effect?
Kung declined to say when the government would act, and the categories must still be published in the government gazette before they bind anyone.
What did prosecutors charge in the Keelung case?
Prosecutors indicted managers over China-bound Super Micro servers built with Nvidia B300 chips for breach of trust and forgery, not the shipment itself.
