Taiwan is expanding its export controls on advanced AI chips, shifting from a targeted blacklist of specific companies to a comprehensive ban covering all Chinese buyers. This policy aligns with US semiconductor regulations established in 2022 to restrict China's military capabilities.
The new regulatory framework introduces criminal penalties for chip smuggling for the first time. Authorities began detaining individuals for illicit chip trade in May 2026, with further legal actions reported by October 2026.
The policy shift follows a January 2026 free trade agreement between the US and Taiwan. Under this pact, Taiwanese companies, including TSMC, committed to investing $250 billion in US semiconductor and AI technology sectors.
Taiwan's semiconductor exports reached a record $87.22 billion in September 2026, marking a 60.9% year-on-year increase. This growth is primarily attributed to rising demand from the United States.
