In June 2025, Taiwan officially expanded its export ban to include Chinese tech giants Huawei Technologies and Semiconductor Manufacturing International Corporation (SMIC). This significant move adds fresh momentum to the ongoing tech war between China and the West, aligning Taiwan more closely with the United States, Japan, the Netherlands, and other democratic allies in restricting the flow of sensitive semiconductor and AI technologies.
Under the new restrictions, announced by Taiwan’s Ministry of Economic Affairs, companies must obtain a special export permit to sell certain strategic products to Huawei, SMIC, and their subsidiaries. These products include tools, advanced materials, AI infrastructure, and manufacturing systems used in high-end chips and semiconductors.
Taiwan Expands Export Ban to Huawei and SMIC
| Feature | Details |
|---|---|
| Entities Banned | Huawei, SMIC, and their subsidiaries |
| Effective Date | June 14–15, 2025 |
| Reason | National security concerns and alignment with U.S. export controls |
| Products Affected | AI chips, semiconductor manufacturing equipment, advanced materials |
| Enforcing Body | Taiwan Ministry of Economic Affairs |
| Global Implications | Disruption to China’s domestic chip ambitions; supply-chain ripple effects |
| Business Impact | Export permits now mandatory for restricted tech products |
| Official Resource | Taiwan Export Control Portal |
Taiwan’s export ban on Huawei and SMIC marks a pivotal moment in the ongoing global semiconductor rivalry. By tightening restrictions on advanced chipmaking technologies, Taiwan is fortifying a coalition of democratic nations striving to contain China’s AI and military ambitions. For tech professionals, investors, and corporate leaders, this new landscape demands proactive strategy—in compliance, supply chain planning, and geopolitical awareness.
Why Taiwan’s Decision Matters
Taiwan is widely recognized as the backbone of the global semiconductor industry, with firms like TSMC and ASE Technology supplying chips that power smartphones, data centers, AI systems, and critical military systems worldwide. The island’s decision to tighten export controls makes it more difficult for China to access the technologies needed to advance beyond 7-nanometer chip technology—a crucial threshold in modern computing.
The key drivers behind Taiwan’s shift include:
- National security: Huawei and SMIC are viewed as extensions of China’s surveillance and military ambitions.
- Global alignment: The move dovetails with existing U.S. export controls and those adopted by Japan and the Netherlands.
- Protecting domestic leadership: Taiwan seeks to preserve its technological advantage and prevent undercutting by Chinese firms.
Timeline: US‑China Tech Sanctions
Understanding the backdrop provides valuable perspective on Taiwan’s decision:
| Year | Event |
|---|---|
| 2019 | U.S. adds Huawei to the Entity List, blocking U.S. firms from selling to Huawei. |
| 2020 | U.S. restricts exports to SMIC without special licenses. |
| 2022 | Japan and the Netherlands impose limits on photolithography equipment exports. |
| 2023 | U.S. tightens AI chip export restrictions. |
| 2024 | Huawei launches 7-nanometer Kirin chip, prompting talk of sanctions evasion. |
| June 2025 | Taiwan adds Huawei and SMIC to its Strategic High-Tech Commodities (SHTC) list, requiring special permits. |
What’s Included in the Export Ban?
The Strategic High-Tech Commodities (SHTC) list is extensive. It covers:
AI Hardware and Software
- GPUs and specialized AI chipsets
- High-speed server processors
- AI training platforms and software frameworks
Semiconductor Equipment
- Extreme Ultraviolet (EUV) lithography machines
- Ion implantation and deposition systems
- Precision etching and inspection machines
Advanced Materials
- High-purity chemicals and photoresists
- Specialty gases (e.g., fluorine-based)
- Elements like gallium and germanium used in advanced chips
Exporters of any of these must apply for permits and submit detailed documentation illustrating the final end-use and end-user. Some devices may be outright denied.
Reaction from the Global Semiconductor Industry
Taiwanese Exporters
Chipmakers and equipment manufacturers now face increased compliance burdens. Companies like TSMC and Nanya Technology must revise export procedures, invest in enhanced record-keeping, and include government-requested oversight in contractual documents.
Chinese Response
SMIC, Huawei, and other affected Chinese companies are expected to respond by pivoting to domestic alternatives, though quality and performance may suffer. дипломатические sources estimate China is investing $150 billion in chip self-sufficiency, signaling long-term resolve but still facing hurdles with sub-7nm processes.
Western Supply Chains
Manufacturers relying on partners in Taiwan must prepare for potential delivery delays. Some are thinking ahead: relocating chip orders to fabs in the U.S. or Europe, or working with alternate Taiwanese suppliers not impacted by the ban.
Case Study: SMIC’s 7‑nanometer Struggles
SMIC has tried to counter previous sanctions by working around U.S. and allied restrictions. Their march efforts to produce 7-nanometer chips involved upgrading older deep ultraviolet (DUV) machines and customizing domestic production lines.
Despite these efforts, the results are mixed:
- SMIC’s 7nm chips lag in energy efficiency and yield compared to TSMC’s 3nm and 5nm chips.
- Key bottlenecks remain in EUV lithography, for which ASML’s equipment is indispensable.
- The new Taiwanese ban further delays SMIC’s access to high-end lithography software and materials.
Economic and Strategic Implications
Rising Costs
Exporters may face higher compliance costs. Tape-and-reel operations must cover licensing delays, audit trails, and potential fines.
Innovation Dilemmas
China’s chip industry may strain without advanced equipment. Reduced tech transfer hampers global innovation—for better or worse.
Reshoring & Diversification
Western and Taiwanese firms are doubling down on regional supply chain diversification, opening fabs in the U.S., Europe, and Southeast Asia. U.S. chips foundries are projected to capture an additional 15% of global production capacity by 2027.
Market Volatility
Stock analysts suggest that further supply constraints could lead to 2–5% price increases for high-end chips over the next year, especially if production hurdles persist at Huawei or SMIC.
Expert Commentary
“Taiwan’s move not only blocks China’s near-term chip ambitions but also plugs a gap in allied export control strategies,” says Dr. Angela Hsu, Tech Policy Analyst at Taiwanese Technology University. “It’s a calibrated step that increases cost and complexity for China’s tech push.”
Mark D. Ellis, Senior Fellow at the Center for Strategic Technology Policy, adds: “Taiwan remains a critical node in the semiconductor ecosystem. Export restrictions here ripple globally—not just in manufacturing, but in R&D, capital flows, and innovation.”
What Businesses and Professionals Should Do Now
Technology leaders, compliance teams, and business strategists should follow these steps:
- Conduct a comprehensive product and tech audit – Identify whether your offerings fall under the SHTC restrictions.
- Update export compliance systems – Use specialized software to track shipments, license applications, and permit statuses.
- Diversify supply chains strategically – Explore options in India, Vietnam, U.S., Europe, and Singapore.
- Ensure legal coordination across jurisdictions – Alignment is vital among Taiwanese, U.S., EU, and Chinese regulations.
- Monitor global policy developments – Keep an eye on BIS amendments, new EU chips Acts, and updates from Japan and the Netherlands.
Global Reactions: Allies and Adversaries
United States
Applauded Taiwan’s move. A U.S. Commerce Department spokesperson noted it “reinforces the global export control framework and protects democratic values” while complimenting Taiwan as a “valued strategic partner” in semiconductor security.
Japan & Netherlands
Both governments have expressed support through official channels, reaffirming their own export restrictions on chip-manufacturing equipment that aligns with U.S. policies.
China
Condemned the ban as a “decoupling tactic” that would harm the global supply chain. The Chinese Commerce Ministry stated it “violates WTO principles,” but added that China “will take necessary steps to protect its legitimate business interests.”
Pou Chen Group Internship Taiwan 2025: Check Application Details for Global Students Now!
A Peek into the Future: What Might Come Next?
- Expanded Blacklist: Taiwan may add other companies tied to China’s AI or defense ecosystems.
- Enforcement Tightened: Customs checks could intensify, seized unlicensed exports may rise.
- Further Western Coordination: Additional alignment may extend to export controls on frontier technologies like quantum computing, metamaterials, and advanced optics.
- Chinese Civil Programs: Domestic efforts may focus aggressively on homegrown equipment, but these will likely take years to reach global competitiveness.
Glossary of Key Terms
| Term | Definition |
|---|---|
| SHTC | Strategic High-Tech Commodities list under Taiwan export law |
| Entity List | U.S. Commerce Department list restricting certain company exports |
| EUV | Extreme Ultraviolet Lithography needed for sub-7nm chips |
| DUV | Deep Ultraviolet lithography, an older technology |
| Nominal Node Size | Designations like 3nm, 5nm indicating semiconductor process prowess |
| Fabrication (Fab) | Manufacturing plant for semiconductor chips |
FAQs
Is Taiwan banning all tech exports to Huawei and SMIC?
No. The restrictions only apply to technologies on Taiwan’s SHTC list. Non-sensitive items may still be exported upon review.
Can firms apply for exceptions?
Yes, but approval is selective and typically reserved for non-sensitive technologies or dual-use cases with audited end-uses.
Will this hurt Taiwan’s tech companies?
Some may lose short-term revenue, but many firms are already pivoting to U.S., European, and Indian partners, cushioning the impact.
Are other countries likely to follow?
Yes. Australia and South Korea are reportedly discussing export control options for high-tech materials and equipment.
