Taiwan considers stricter AI chip export controls to China to align with US measures and address semiconductor smuggling.

Taiwan authorities are considering much stricter export controls on AI chip sales to China as part of ongoing trade talks with the US. The proposed controls would restrict sales to all customers in China, not just specific companies on an export blacklist like Huawei Technologies Co.

Currently, Taiwan does not consider unauthorized AI chip exports to China to be a crime. Under the proposed measures, Taiwan would be able to prosecute AI chip smuggling to China as a criminal violation for the first time, giving authorities more legal tools to address diversion of advanced hardware like AI servers with Nvidia Corp. chips.

Gigabyte Technology Co. and Asustek Computer Inc., which assemble Nvidia-powered servers, could face increased pressure to tighten oversight of their business if the controls are implemented. Gigabyte shares fell as much as 3.2% in early trading in Taipei and Asustek 4.4% Wednesday.