Taiwan bans chip exports to Huawei and SMIC after Huawei ignored U.S. regulations and tricked TSMC into making 2 million AI processors

Taiwan's Bureau of International Trade updated its (PDF file) list of companies dealing in 'strategic high-tech products' on June 14, 2025, to include Chinese companies Huawei and Semiconductor Manufacturing International Corporation (SMIC), as well as several subsidiaries of both companies. The Taiwanese government announced that 'on June 10, to counter arms proliferation and address other national security concerns, we added approximately 601 entities from Russia, Pakistan, Iran, Myanmar, and mainland China, including Huawei and SMIC, to the Entity List.'

Taiwan Imposes Technology Export Controls on Huawei, SMIC - Bloomberg
https://www.bloomberg.com/news/articles/2025-06-14/taiwan-imposes-technology-export-controls-on-huawei-smic

Taiwan bans chip exports to Huawei, SMIC — ban comes after Huawei tricked TSMC into making two million AI processors despite US restrictions | Tom's Hardware
https://www.tomshardware.com/tech-industry/semiconductors/taiwan-bans-chip-exports-to-huawei-smic-ban-comes-after-huawei-tricked-tsmc-into-making-one-million-ai-processors-despite-us-restrictions

Taiwanese companies cannot ship products to companies on the Taiwan Bureau of International Trade's Entity List without government approval. In the case of Huawei, the list also includes several overseas bases, including Japan, Russia, and Germany. This makes it more difficult for Huawei to acquire technology outside of China.

The restrictions will prevent Huawei and SMIC from building factories or accessing materials and equipment in Taiwan, which could significantly delay Huawei's reported rapid construction of semiconductor production lines in China.

Satellite images reveal that Huawei is rapidly building semiconductor production lines in China - GIGAZINE

For many years, Taiwan has completely banned the export of semiconductor lithography equipment and other products to China, but this is the first time that it has placed major Chinese technology companies and semiconductor manufacturers on the entity list.

American economic media outlet Bloomberg pointed out that 'tension between Taiwan and China has been rising since Taiwan's President Lai Ching-te described China as a 'hostile foreign power' in early 2025,' and said the Taiwanese government's latest restrictions are a sign of a deterioration in relations between Taiwan and China.

In addition, IT news site Tom's Hardware points out that behind these Taiwanese government moves may have been private negotiations between the United States and Taiwan regarding TSMC. In fact, in November 2024, the United States asked TSMC to stop supplying chips to Chinese customers.

TSMC notifies all Chinese customers to stop supplying AI chips below 7nm process - GIGAZINE

It was also reported that TSMC was hit with a huge fine for unknowingly supplying 2 million chiplets for Huawei's Ascend 910 series AI processors, issues that Tom's Hardware said were the catalyst for the restrictions.

TSMC may be fined more than 140 billion yen for using its chips in Huawei's AI processors - GIGAZINE

In addition to TSMC, there are many other semiconductor companies in Taiwan. By being included on the Entity List, it is expected that Huawei and SMIC will find it increasingly difficult to obtain products and technologies from not only TSMC but also other semiconductor companies.