[Finance] Stricter Controls on AI Chips Exported to China; Minister of Economic Affairs States Legislative Amendments Underway for Swift Action

Supermicro is suspected of illegally transferring Nvidia's artificial intelligence (AI) chips to China. Legislators are calling for Taiwan to tighten controls on AI chip exports to China. Minister of Economic Affairs Kung Ming-hsin stated today (17th) that the Ministry of Economic Affairs has begun amending relevant laws and will handle it as soon as possible. However, due to the involvement of national security, the National Science and Technology Council, and the Ministry of Finance, cross-ministerial discussions are necessary before a decision can be made. During the review of the non-operating portion of the subordinate unit budgets for the current fiscal year by the Legislative Yuan's Committee on Economic Affairs, Minister of Economic Affairs Kung Ming-hsin, along with Director-General of the Bureau of Foreign Trade Liu William and other relevant officials, were present for questioning. During questioning, Democratic Progressive Party legislator Chung Chia-pin expressed concern over the case where Supermicro executives are suspected of illegally transferring Nvidia's artificial intelligence (AI) chips to China. He questioned why only 12 items, such as chemical mechanical planarization equipment and photoresist strippers, are restricted for export to China under the regulations for strategic high-tech goods. Liu William responded that the initial restriction on 12 items exported to China was aimed at protecting Taiwan's industrial competitive advantage. Chung Chia-pin further pointed out that in the early years, Taiwan and China had both competition and cooperation in semiconductor wafers. Taiwanese companies exported chips to China, assembled them, and then sold them to the United States. However, at the same time, they did not want China to acquire advanced wafer manufacturing technology, hence the prohibition of exporting wafer manufacturing equipment to China. Chung Chia-pin believes that according to Article 27 of the "Trade Act," strategic high-tech goods exported to controlled regions are punishable by imprisonment for up to 5 years. According to Article 27-2 of the "Trade Act," strategic high-tech goods exported to regions other than controlled regions are subject to a fine of NT$60,000 to NT$3 million. However, he questioned why China is not listed as a controlled region for chip exports. Kung Ming-hsin explained that the Ministry of Economic Affairs has begun amending relevant laws, but due to the involvement of cross-ministerial responsibilities and the need for discussion with national security agencies, a decision cannot be made yet. Speaking to reporters after the meeting, Kung Ming-hsin emphasized that the relevant legislative amendments involve national security and cannot be decided by the Ministry of Economic Affairs alone. Although the Ministry of Economic Affairs is the executive and supervisory authority for the Trade Act, the amendments involve responsibilities beyond its scope. Therefore, in-depth discussions with relevant agencies are necessary, such as export controls and trade practices involving the Ministry of Finance's Directorate General of Customs, and the National Science and Technology Council must also determine which chips are subject to control. Regarding the control of AI chip exports to China, Kung Ming-hsin stated that there will definitely be corresponding measures, and they will be implemented as soon as possible. (Editor: Chen Wen-wei)