Taiwan Weaponizes Chip Exports to Blunt China’s Advance on World Stage

For years, Taiwan has viewed its dominance in supplying countries with cutting-edge chips as a shield from Chinese aggression.

Taipei’s chip curbs reflect its strategy to increasingly use economic and trade policy for diplomatic goals. (Photo: TSMC) 

Now, officials are testing semiconductors as a diplomatic sword, Yian Lee reported for Bloomberg News.

Taipei for the first time unilaterally imposed semiconductor export controls on a country last week, limiting shipments to South Africa for actions that “undermined our national and public security.”

That marked the latest twist in a long-running spat over the nation’s efforts to weaken ties with Taiwan — a key demand of Beijing.

Taipei’s chip curbs reflect its strategy to increasingly use economic and trade policy for diplomatic goals, according to a Taiwanese official familiar with the matter.

Similar measures could be imposed on other unfriendly nations, the person added, asking not to be identified discussing sensitive issues.

“By utilizing Taiwan’s position in the global chip supply chain, this looks like Taipei’s attempt at building an autonomous deterrent on the world stage,” said Wen-ti Sung, non-resident fellow at the Atlantic Council’s Global China Hub.

“Going forward, other governments will be looking at this example and considering not only Taiwan’s carrots but also its potential sticks.”

While Taiwan likely wouldn’t wield such restrictions against major European economies or its main military backer, the US, President Lai Ching-te’s decision to target smaller partners could amplify broader concerns over its dominance of chips — including in the US, Debby Wu, Philip Glamann, and Miaojung Lin also reported for Bloomberg News.