Taiwan Says Its Chip Firms Will Adhere To New US Rules That Include China’s Supercomputing Entities

© Reuters.

© Reuters.

TAIPEI (Reuters) – Taiwan said on Wednesday that its chip companies will adhere to US rules after Washington added seven Chinese supercomputing entities last week to an economic blacklist and after a Taipei-based chip maker stop requests from one of the entities mentioned. The US Commerce Department said the seven Chinese entities were “involved in the construction of supercomputers used by China’s military actors, their destabilizing military modernization efforts and / or weapons of mass destruction programs.” Companies or other individuals listed on the US Entity List are required to apply for licenses from the Department of Commerce who face strict scrutiny when applying for permission to receive items from US suppliers. Firms from Taiwan, technology powerhouse, They are major semiconductor suppliers globally, and Economy Minister Wang Mei-hua said they would follow the rules of Taiwan and the United States. “Our companies, whether they are producers or exporters, must agree to the rules of our country. Of course, the United States has new rules, and our companies will pay attention and comply with the key criteria of the American rules,” he told press. The US move came amid its mounting tensions with China over Taiwan. China has never renounced the use of force to bring the democratically ruled island under its control. It also came amid a global semiconductor shortage that has placed Taiwan at center stage in the technology supply chain. On Tuesday, Taiwan’s Alchip Technologies Ltd said it had stopped production of all Tianjin Phytium information technology-related products, which is on the new US list. Alchip, which said 39% of its revenue last year came from Phytium, added that it was collecting “detailed documents for our US attorney to determine whether the products are subject to EAR (Export Administration Regulations).” A permit from the US Bureau of Industry and Safety “will be obtained for Phytium products if necessary,” he added. Its shares fell 9.9% on Wednesday, causing losses of more than a third of their value since the Commerce Department announcement last week. Separately, Hong Kong’s South China Morning Post reported that Taiwan Semiconductor Manufacturing Company Co Ltd (TSMC), the world’s largest contract chip maker, has suspended new orders for Phytium. TSMC said it could not confirm the report and declined to comment further. TSMC shares fell 0.5% on Wednesday, outpacing a 1.1% drop in the broader Taiwanese stock market.

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