Taiwan's Ministry of Economic Affairs has announced the preparation of legislative amendments that will make the supply of advanced AI chips to China a criminal offense. Economic Minister Kung Ming-hsin stated this in an interview with Bloomberg, emphasizing that the measures are aimed at better aligning with U.S. export legislation requirements. According to him, the bulk of advanced AI chips are designed by American companies, but actual production is concentrated on the island—primarily at TSMC—making it necessary to synchronize Taipei's and Washington's regulatory policies.
From Administrative Measures to Criminal Liability
Under current Taiwanese legislation, there is no separate criminal article specifically for the direct supply of advanced AI chips to China: if such cases are prosecuted, it is under other legal grounds, including document forgery. A clear example is the May detention by the Keelung City Prosecutor's Office of three people suspected of storing about 50 servers with Nvidia equipment, where charges were formulated precisely as document forgery. To close this loophole, authorities intend to include advanced semiconductor components and AI servers in the list of goods exported from the island subject to special control, after which their smuggling will be classified as a criminal offense. Taiwan President Lai Ching-te previously confirmed readiness to meet U.S. requirements in the field of export control without disclosing details.
Synchronization with Washington and the Japan Precedent
According to the minister, further coordination of control measures will be structured taking into account the conditions of the foreign trade agreement concluded this year between Taiwan and the U.S. A similar mechanism was previously applied to Japan: Tokyo guaranteed Washington the direction of about $21 billion for the construction of two new GlobalFoundries chip manufacturing plants in New York State. Now, according to Bloomberg, U.S. authorities are also nudging Taipei toward comparable conditions, as Taipei prepares its own support package for semiconductor manufacturing in the U.S.
Texas Tech Parks and Credit Guarantees
The island nation plans to facilitate the creation of several industrial tech parks in the U.S. for semiconductor industry suppliers and AI server manufacturers. Construction will be funded by private business, while the Taiwan government will help companies with credit guarantees and organize interaction with U.S. authorities. Primarily, this concerns a manufacturing site in Texas valued at up to $4 billion, where contractors and partners of TSMC and Foxconn, which already have facilities in the U.S., are expected to settle. Each such complex is estimated at $2–4 billion, and their number, according to the minister's enigmatic wording, will be "more than one." Earlier this year, Taipei already volunteered to provide $250 billion in credit guarantees for the development of semiconductor manufacturing in the U.S.
Context: The Terafab Project and TSMC's Role
Texas is becoming a key concentration point for chip investments: Tesla, SpaceX, and Intel are ready to develop microchip production in the state under the Terafab project. Taiwan's TSMC is still determining its role in this project, while both sides insist on full control over the Texas enterprises, which leaves the final configuration of cooperation somewhat unclear. Against this backdrop, industry observers note that Taiwan is increasingly using its semiconductor leadership as a tool of international policy, expanding its footprint abroad—including TSMC's large-scale investments in Arizona facilities.
