Taiwan Puts China’s Leading Chipmakers, Huawei, SMIC on Trade Blacklist

The new Taiwan regulation is a great loss for the top chipmakers SMIC and Huawei, who have been putting a lot of effort into catching up in the fight for chip technology.

Amid the growing tech rivalry between China and the United States, Taiwan has put two of China’s top chipmakers, Huawei Technologies and Semiconductor Manufacturing International Corp (SMIC), on a trade blacklist. That means they are unacceptable or undesirable for trade or dealings with other businesses.

The Ministry of Economic Affairs posted the latest list on its website, announcing that the International Trade Administration of Taiwan listed Huawei, SMIC, and other subsidiaries as Strategic High-Tech Commodities Entities.

SMIC or Huawei did not respond to requests for comment.

It killed China’s aspiration to compete with US chipmakers like Nvidia when the list prohibited both companies from buying crucial semiconductor technologies from Taiwanese businesses.

The new Taiwan regulation is a great loss for the top chipmakers SMIC and Huawei, who have been putting a lot of effort into catching up in the fight for chip technology.

Beijing views self-governed Taiwan as part of China that should be reunited by force if required. Although the United States and many other countries do not recognise Taiwan as an independent state, Washington is determined to oppose any attempt to take the island by force and is committed to arming it.

According to Ray Wang, a semiconductor and tech analyst based in Washington, the latest limitation would further tighten the current loopholes and limit cooperation between Chinese companies on the entity list and Taiwanese companies, adding to the existing export ban the US did on mainland tech leaders.

Shenzhen-based Huawei and Shanghai-based SMIC are China’s best chances to make breakthroughs in the semiconductor industry. The two companies launched a domestically produced semiconductor using a 7-nanometer process first used in Huawei’s high-end Mate 60 smartphone models in 2023.

The US has been investigating whether Taiwan and its companies have contributed to the development of SMIC and Huawei’s chip manufacturing while also strengthening export restrictions on China. According to sources, the US Commerce Department instructed Taiwan Semiconductor Manufacturing Co. (TSMC) to stop providing mainland clients access to its advanced processing services after the company stopped shipments to Sophgo, a Chinese chip designer whose chip matched the one in the Huawei 910B.

TSMC, the world’s largest contract chipmaker, tightened exports to the mainland after Canadian tech research company TechInsights disassembled Huawei’s 910B AI processor and found a TSMC chip. The multi-chip 910B is the most advanced AI accelerator mass-produced by the Chinese manufacturer.

Wang stated that he did not expect Taiwan’s recent move against China’s top chipmakers, Huawei and SMIC. It would be a significant setback for either company. He stated that these companies were already struggling to expand their production with the previous curbs.

According to Wang, the new regulation is a further attempt to tighten the screws on control measures led by Washington.

Semiconductors are the foundation for cryptocurrency mining, especially for Bitcoin. Mining depends on specialized chips called application-specific integrated circuits (ASICs) designed to execute complex cryptographic calculations.

For example, ASIC chips can handle billions of calculations per second. It is significantly more effective than general-purpose CPUs or GPUs at processing the SHA-256 algorithm used by Bitcoin. Using this specialization, miners solve cryptographic puzzles more quickly, protecting the blockchain and getting rewards for solving blocks.

The mining industry needs these high-performing chips to increase its profitability and competitiveness, particularly as energy costs and mining complexity get high.

Taiwan’s recent export limitations further limit China’s top chipmakers’ access to global technology supply chains, highlighting the strategic importance of semiconductor manufacturing for geopolitics and advanced fields, including artificial intelligence and cryptocurrency mining.