What changes?
Taiwan is adding AI servers and the latest chips to its controlled export list. According to Minister of Economic Affairs Kung Ming-hsin, the move is part of commitments made under the Reciprocal Trade Agreement with the US, which saw Washington cut tariffs on Taiwanese goods to 15%.
What are the penalties?
Once the controls take effect, anyone caught smuggling these items to China will be charged under the Foreign Trade Act, with penalties of up to five years in prison and/or a fine of around $92,500. Previously, Taiwan did not treat AI chip exports to China as a crime, so violations had to be pursued under other laws.
Ties to the Super Micro case
The US has long sought to stop advanced NVIDIA chips from being smuggled into China. In one of the biggest cases, three Super Micro employees, including co-founder Yih-Shyan "Wally" Liaw, were accused of smuggling $2.5 billion worth of AI servers. Taiwanese authorities later raided Super Micro's Taipei offices and indicted nine individuals in connection with the probe.
Regional impact
The move will likely please Washington, which is pressing other countries to tighten controls on advanced AI chip flows to China. However, it may also provoke Beijing, which condemned Taipei after it imposed export restrictions on Huawei and SMIC last year.
