Taiwan’s export rules currently cover 12 categories of wafer fabrication equipment. Proposed legislation would extend them to integrated circuits, key materials, parts and the machinery behind them, and would add criminal penalties where there are none today.
The Economics Committee of the Legislative Yuan took up the amendment at a public hearing on Monday. Members of the governing Democratic Progressive Party drafted it, and the Ministry of Economic Affairs has backed it.
The case that prompted it
In August, Keelung prosecutors indicted nine people over 74 Supermicro servers fitted with Nvidia GPUs that were allegedly routed to China. Employees of the two American companies were among them. Violations would draw a maximum of 10 years behind bars, and NT$10M is the ceiling on fines, with proceeds confiscated.
A separate anti-circumvention clause would close the third-country transshipment route. That is the hardest part to police in practice. A chip that leaves Taiwan for Malaysia and arrives in Shenzhen is legally identical to a chip destined for Penang.
Aligned with Washington, wider than Washington
The ministry told legislators the amendment would strengthen coordination with the United States. Taiwan already inherits US controls through the Foreign Direct Product Rule, which reaches chips made abroad with American technology.
Researchers argued at the hearing that supply chain and semiconductor security change faster than statute, and that the country needs rules able to respond in weeks rather than legislative sessions.
Lawmakers who introduced the bill warned that advanced chips serve precision-guided weapons and supercomputing as readily as commercial products, which is the logic that turns a trade amendment into a security bill.
