Taiwan weighs stricter export controls on AI chip sales to China

The reported considerations in Taiwan come after the U.S. first imposed strict restrictions on AI chip exports to China in 2022, which Beijing has already balked at. The Bloomberg report says the considerations are part of an effort to address chip smuggling risks and aim to give authorities more legal tools to address diversion of advanced hardware, chiefly AI servers with Nvidia chips, from Taiwan to China.

Prior smuggling cases appear to have shaped this push. Employees of server maker Super Micro Computer were implicated in a major Department of Justice investigation this year for allegedly smuggling at least $2.5 billion worth of Nvidia chips into China, and the plot also implicated Super Micro co-founder Yih-Shyan Liaw, who was arrested by the DOJ. Nvidia employees in Taiwan were also implicated in a smuggling ring, according to the report.

If Taiwan proceeds, the measure risks drawing more ire from Beijing, which has already balked at strict U.S. restrictions on AI chip exports to China. Whether the considerations translate into formal rules, and in what form, cannot be determined from the report.