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Taiwan to criminalize unauthorized AI chip exports to China under Foreign Trade Act
Taiwan's Economy Minister Kung Ming-hsin confirmed to Bloomberg on October 16 that Taiwan plans to add advanced semiconductors and AI servers to its controlled-goods list, making unauthorized shipments to China a criminal offense under the Foreign Trade Act. The move fulfills commitments under the Taiwan-US Agreement on Reciprocal Trade; no implementation timeline has been set.
Why it matters
Taiwan currently lacks a dedicated criminal offense for AI chip smuggling, forcing prosecutors to rely on secondary statutes — the legal gray area that smuggling rings exploit. Once enacted, employees and executives of server assemblers operating in Taiwan, such as Supermicro, Gigabyte and Asustek, would face domestic criminal liability for the first time, not just US-jurisdiction exposure.
Full report
Kung told Bloomberg on October 16 that Taiwan will add cutting-edge semiconductors and AI servers to its export-control list, so unauthorized shipments could lead to criminal charges under the Foreign Trade Act. He said the changes are part of the commitments under the Taiwan-US Agreement on Reciprocal Trade, signed January 15, 2026, with some controls aligned to US rules — but he gave no timeline for implementation.
The move follows a string of smuggling cases: in August 2026, Taiwan indicted nine people, including an Nvidia manager, for smuggling 130 AI servers to China, 74 of which reached their destination; in March the US Justice Department charged Supermicro executives with smuggling billions of dollars' worth of Nvidia chips to Alibaba via Taiwan and Thailand. China's Commerce Ministry also issued Notice No. 48 on October 16, proposing to add 23 AI technologies to its export-control catalog.
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