Another thorn in Beijing's side in the artificial intelligence (AI) race: Huawei and Semiconductor Manufacturing International Corp (SMIC), two Chinese tech companies that manufacture, among other things, semiconductors dedicated to AI, will no longer have access to Taiwanese chips, machines, and components. Since June 10, Taiwan, which supplies some of the world's materials and semiconductors, has placed these two companies, along with several of their subsidiaries, on its list of companies subject to restrictions, Bloomberg reported on Saturday, June 14. "On June 10, we added some 601 entities from Russia, Pakistan, Iran, Myanmar, and China, including Huawei and SMIC, to the list of entities (...)," the Taiwanese administration said in a statement published on Sunday, June 15, and echoed by our colleagues. The goal of this update is "to combat weapons proliferation and address other national security concerns," Taipei said.
As a result, Huawei and SMIC may have greater difficulty purchasing components needed to manufacture chips dedicated to artificial intelligence. Once on this list, the island's companies will first have to obtain authorization (a license) before being able to sell any product to these two Chinese companies – an authorization that will be systematically refused to the two flagships of Chinese industry. This is a new measure intended to curb China's efforts to become self-sufficient in semiconductors.
In 2023, Taiwanese companies helped Huawei develop chip manufacturing plants in China
The country is already affected by numerous American restrictions, amid a techno-trade war. Since October 2022, Beijing and its local companies have been targeted by "export controls." This is a set of rules defined by Washington that restrict the sale of semiconductors and related equipment produced in the United States – but also to its allies, including Taiwan.
Taiwan already imposed certain general restrictions on its Chinese customers. Since 2020, TSMC, the (Taiwanese) world leader in semiconductors, has, for example, stopped delivering its chips to Huawei, due to American export controls. But for the first time, two Chinese tech champions have been designated by the Taiwanese administration. This tightening, which takes place several weeks after yet another tightening of American rules, comes against a backdrop of growing tension between Beijing and Taipei.
China considers the island part of its territory: Beijing has pledged to unify with Taiwan, using force if necessary. For his part, Taiwanese President Lai Ching-te declared that China is a "foreign hostile force».
Two years earlier, Taiwanese companies had helped Huawei develop several chip manufacturing plants in southern China, according to Bloomberg.
From now on, the Chinese telecommunications and semiconductor champion will no longer be able to purchase any components from Taiwan, as will its Japanese, Russian, and German subsidiaries. Contacted by our colleagues, Huawei and SMIC did not respond to their requests for comment.
Source: Bloomberg
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