Taiwan Blocks AI Chip Supplies to Huawei, SMIC in New Export Crackdown
Around 601 entities from mainland China, Russia, Pakistan, Iran, and Myanmar were identified by Taiwanese officials.
Taiwan’s International Trade Administration has added Chinese companies such as Huawei and SMIC and their subsidiaries to a list of entities requiring special approval for shipments involving strategic high-tech commodities.
According to Bloomberg, Taiwanese companies must now get government clearance before exporting crucial technologies, materials, or equipment to either firm — a move that could severely impact China’s semiconductor manufacturing capabilities.
“Huawei and SMIC were among 601 entities from mainland China, Russia, Pakistan, Iran, and Myanmar added on June 10 to address national security risks and arms proliferation,” the trade administration said.
Losing access to Taiwan’s cutting-edge plant construction tools and resources could set back Beijing’s AI chip ambitions, as the island remains a key hub in the global semiconductor supply chain.
Huawei’s chips may still lag a generation behind U.S. rivals, but the company is finding new ways to boost performance, according to CEO Ren Zhengfei.
In an interview with China’s People’s Daily, Ren said Huawei is leveraging techniques like cluster computing and investing heavily in R&D—spending 180 billion yuan ($25 billion) annually.
Ren highlighted growing potential in compound chips, which combine multiple elements to enhance processing power. Despite ongoing U.S. export restrictions that have cut off access to advanced semiconductor tools, Ren downplayed concerns, stating there’s “no need to worry about the chip problem.”
According to US officials, Huawei could manufacture up to 200,000 advanced AI chips in 2025, a top U.S. export controls official told Congress on Thursday, cautioning that while the number falls short of China’s demand, the country is rapidly closing the gap with U.S. technology.
Jeffrey Kessler, Under Secretary of Commerce for Industry and Security, said Huawei is expected to supply most—if not all—of its upcoming Ascend 910C AI chips to domestic Chinese companies. The chips are intended to serve as an alternative to those made by the U.S. giant Nvidia.
Since 2019, sweeping U.S. export restrictions have blocked Chinese firms from accessing advanced American chips and chipmaking tools, aiming to curb Beijing’s tech and military ambitions.
“China is investing heavily in AI chip production and advancing its capabilities,” he said during a congressional hearing. “We must not have a false sense of security—China is catching up fast.”
Earlier this year, it was also reported that DeepSeek, the company that sent Silicon Valley into a meltdown with its open-source Large Language Model (LLM), is rumored to be training its next model—R2—using Huawei Ascend 910B chips.
The model showed 82% utilisation of the processor cluster and delivered a peak performance of 512 PetaFLOPS of FP16 precision.
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