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Taiwan Joins U.S. in Blacklisting Chinese Tech Giants Huawei and SMIC

In a sweeping escalation of trade restrictions, Taiwan’s International Trade Administration has officially added Huawei and SMIC (Semiconductor Manufacturing International Corp) — two of China’s most prominent tech companies — to its Strategic High-Tech Commodities Entity List.

The move, which blacklists 601 new foreign entities, including numerous Huawei and SMIC subsidiaries, marks a significant alignment with U.S. foreign policy, especially amid growing geopolitical tensions with Mainland China.

This updated entity list mandates Taiwanese companies to apply for special licenses before exporting any strategic or high-tech goods to these listed firms — creating new layers of compliance, oversight, and penalties.

Why Taiwan’s Blacklist Matters Globally

Both Huawei and SMIC are already blacklisted by the United States, barred from accessing advanced semiconductor technologies under sweeping export control rules issued in 2019 and expanded in 2022.

By joining the U.S. in this hardline stance, Taiwan — the world’s most crucial chip manufacturing hub — is effectively sealing off critical supply routes that Chinese tech firms previously accessed through loopholes.

“The inclusion of Huawei and SMIC is less about immediate impact and more about sealing cracks in enforcement,” said Ray Wang, an independent tech analyst, in an interview with CNBC.

Taiwanese companies such as TSMC (Taiwan Semiconductor Manufacturing Co.), the global leader in contract chip manufacturing, had already been complying with U.S. restrictions, but now face stricter domestic accountability.

Background: The Huawei–TSMC Controversy

This development comes after a major compliance scandal in October 2024, when researchers at TechInsights found a TSMC-manufactured chip embedded in a Huawei AI training card — despite export controls.

The discovery prompted the U.S. Commerce Department to order TSMC to halt chip shipments to Huawei and launched a full investigation. According to Reuters, TSMC could face a penalty of up to $1 billion for allegedly violating U.S. export laws.

Huawei, in its effort to reduce reliance on U.S. and Taiwanese suppliers, has been developing alternatives to Nvidia GPUs for AI, but progress has been slow. The company has been hamstrung by a lack of domestic semiconductor infrastructure and engineering scale, according to analysts.

Still, Huawei was able to quietly acquire millions of GPU silicon dies — the building blocks of AI processors — through legal grey zones, said Paul Triolo, SVP for China at DGA-Albright Stonebridge Group.

Impacts on Taiwan’s Semiconductor Industry

While TSMC and other major players are unlikely to see significant revenue loss from the ban, the symbolism is powerful, said Brady Wang, Associate Director at Counterpoint Research.

“This isn’t just about Huawei or SMIC,” Wang said. “It’s about Taiwan showing the world it stands shoulder-to-shoulder with the U.S. in protecting advanced technology.”

The real impact may fall on smaller Taiwanese chipmakers and component suppliers — particularly those who maintain indirect or legacy relationships with Chinese firms. These companies now face heightened scrutiny and complex compliance burdens that could hurt their bottom line.

Tech War Set Against Rising Military Tensions

Taiwan’s decision isn’t happening in a vacuum. It comes at a time of escalating military pressure from Beijing, which views Taiwan as a breakaway province that must be reunited with the mainland — by force if necessary.

In April 2025, China launched its largest-ever military exercises near Taiwan, prompting strong words from Washington and reaffirmation of the U.S. commitment to the island’s security.

Last Sunday, China’s top political adviser Wang Huning reiterated Beijing’s stance, calling for “national reunification” and vowing to oppose any form of Taiwanese independence, as reported by Chinese state media.

Taiwan’s Strategic Alignment Comes at a Critical Juncture

By blacklisting Huawei and SMIC, Taiwan isn’t just making a trade decision — it’s taking a geopolitical stand.

The decision:

• Reinforces global efforts to curb Chinese access to advanced tech
• Deepens the Taiwan–U.S. tech and security partnership
• Adds pressure on smaller suppliers to reevaluate their China exposure

At a time when the semiconductor industry is at the heart of global strategic competition, Taiwan’s stance sends a loud and clear message: national security and international alliances now outweigh commercial risk.