US–China chip tensions rise as Taiwan blacklists Huawei: Details here

Taiwan has taken its most aggressive step yet in the ongoing tech war between China and the United States.

For the first time, the island has added Huawei Technologies and leading Chinese chipmaker SMIC (Semiconductor Manufacturing International Corporation) to its export control list, a move that could reshape cross-strait tech ties and tighten the noose on Beijing’s semiconductor ambitions.

The decision bars Taiwanese firms from doing business with the two Chinese giants without a government license. It’s a dramatic shift for a tech powerhouse that, until now, avoided taking sides too visibly.

“This marks a substantive move toward strategic technological competition with China,” said Chiang Min-yen, a researcher at Taiwan’s state-backed RIDEET think tank, as quoted by Bloomberg.

Why this matters

Taiwan’s action comes after years of quiet US pressure. Both the Trump and Biden administrations had urged Taipei to enforce stricter export curbs, especially as Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s most advanced chipmaker, remains deeply embedded in global supply chains.

According to Bloomberg News, US officials have pushed Taiwan to prevent companies from supplying even trace amounts of American-linked technology to Chinese entities under sanctions.

In 2023, TSMC was found to have unknowingly manufactured millions of AI chips for Huawei, routed through a third party later blacklisted by Washington. While TSMC has since cut ties, Taiwan had largely avoided direct blacklisting until now.

Taking a page from Washington

Taiwan’s Ministry of Economic Affairs cited national security concerns for the new blacklisting, echoing similar language used by the US Department of Commerce.

“We welcome Taiwan’s move,” said a US congressional panel on China policy, quoted by Reuters. “Partners must act to stop the CCP’s illegal tech transfer network.”

Taiwan’s Entity List now includes 601 companies, including dozens tied to China’s military-industrial complex and surveillance tech firms. But Huawei and SMIC are the most prominent by far.

“This is not about short-term sales; it’s a long-term alignment,” said a senior trade official in Taipei, speaking anonymously to Bloomberg.

What happens now?

On paper, the blacklist may not immediately block all business. Many Taiwanese companies operate subsidiaries in mainland China, which may technically fall outside the island’s jurisdiction.

“The move is symbolic but not disruptive— yet,” said Steven Tseng, chip analyst at Bloomberg Intelligence. “Huawei and SMIC have already localised much of their sourcing.”

But it sends a clear political signal. New President Lai Ching-te has pledged to reduce Taiwan’s reliance on the mainland and strengthen ties with democracies like the US and Japan.

According to Bloomberg, Lai’s administration is now expected to tighten scrutiny on component sales, construction contracts, and even IP transfers to Chinese tech parks.

Cross-strait tensions on edge

The timing is no coincidence. Beijing has sharply criticised Lai, accusing him of promoting “independence in disguise” and branding his administration a “troublemaker” after he referred to China as a “foreign hostile force”.

“Lai will now be able to speed up his agenda-setting against China on several fronts, including defence, trade, and tech,” said Soong Hseik-wen, policy researcher at National Chung Cheng University, speaking to Bloomberg.

Taiwan’s investment in China has already plunged from $14.6 billion in 2010 to just $3.6 billion in 2024, according to official statistics. The blacklist may be the next phase of that economic decoupling.

The bigger picture

Taiwan’s move comes as a growing number of US allies, from Japan to the Netherlands, restrict semiconductor exports to China. Yet neither Tokyo nor Seoul has directly blacklisted Huawei or SMIC. That makes Taipei’s decision even more significant.

For China, the implications are deep. While Huawei and SMIC have spent years building a domestic supply chain, losing access to Taiwan’s precision tools, silicon wafers, and expertise could further delay their AI and chip ambitions.

Taiwan has made its choice. As the global semiconductor war enters a new phase, the island is tightening its grip on critical tech and turning away from decades of cross-Strait economic interdependence.

Whether symbolic or strategic, the blacklist sends a message Beijing can’t ignore: Taiwan is not just in front of geopolitics; it’s now in the frontline of the tech war.

(With inputs from the agencies)