Taiwan indicts 10 over smuggling US military-grade chips to China

What happened

Taiwanese prosecutors have indicted 10 company leaders over the alleged smuggling of military-grade parts from US chipmakers Texas Instruments (TI) and Analog Devices (ADI) to China. Orders were reportedly placed using the name of Taiwan's own National Chung-Shan Institute of Science and Technology (NCSIST) or other Taiwanese companies.

The method

According to prosecutors, the parts were manufactured in the US, Thailand, the Philippines and South Korea, with no processing in Taiwan that would change their country of origin. They were nonetheless declared "Made in Taiwan" to mislead customs officials. The orders included written statements promising no export or re-export to US-sanctioned parties; prosecutors say those statements were false. The distributors involved were reportedly duped.

Where they went

The equipment was cited for use in radar receivers, electronic reconnaissance, jammers, ultrasound, communications gear and antenna arrays, and is believed to have reached Chinese research units building missiles and military radar. Buyers included Hong Kong companies or firms effectively controlled from mainland China.

Charges and possible sentences

The defendants face fraud, forgery and money laundering charges, with 2 to 10 years sought for each. Prosecutors also asked the court to confiscate proceeds. Three main groups of defendants allegedly made NT$92.75 million, NT$135.83 million and NT$108.11 million respectively. No court date has been announced, and neither ADI nor TI has commented.

Why it matters

Because violating US export control laws is not a crime in Taiwan, the charges fall under fraud and forgery. Taiwan's Foreign Trade Act does carry prison terms for exporting listed high-tech goods to controlled areas without a permit, and the economy ministry promised earlier this year to amend the law to tighten controls on AI chip exports to China.